TOKYO: Japan’s Nikkei index fell 2% as the yen strengthened against the dollar in the wake of the US Fed’s decision not to raise interest rates.
The Nikkei 225 index closed down 2% at 18,070.21. The dollar fell against the yen following the Fed’s decision, which hit shares in Japanese exporters. Shares in Toyota and Honda dropped 1.4%, while Panasonic was 2.1% lower.
A stronger yen against the dollar affects exporters, as it makes their goods more expensive to sell overseas. The US Fed’s decision to hold rates also renewed concerns about the strength of the global economy.
The Federal Reserve said worries over the global economy, particularly China, had influenced its decision not to raise rates. US shares saw choppy trade after the decision, with both the Dow Jones and S&P 500 closing lower.
Angus Nicholson, market analyst at trading firm IG, said the Fed’s decision to hold rates could influence other central banks to ease further. “It is a telling sign for how much the global outlook has deteriorated in the past few months, with the likelihood for even an October hike now sitting at 19.2%,” he said.
Chinese shares were mixed after government data showed that property prices had shown some signs of recovery. New home prices rose for a fourth consecutive month in August, up 0.3% from the previous month, but were down 2.3% from a year ago. The property sector accounts for 15% of China’s economic growth, so even minimal gains have a positive impact on the world’s second largest economy.
The Shanghai Composite index ended 0.4% higher at 3,097.92, while Hong Kong’s Hang Seng index closed up 0.3% at 21,920.83. In Australia, the S&P/ASX 200 index erased earlier losses to end up 0.6% at 5,178.50. South Korea’s benchmark Kospi index finished 1% higher at 1,995.95.
