Nikkei falls after ECB's signal stokes volatility

jueves 10 de marzo de 2016 22:51 GYT
 

By Joshua Hunt

TOKYO, March 11 (Reuters) - Japanese stocks fell on Friday morning after European Central Bank chief Mario Draghi dampened hopes of further interest rate cuts after easing aggressively, stoking volatility in the yen and blunting risk appetite.

The Nikkei share average slipped 0.9 percent to 16,705.55. Japan's benchmark index remains on course to shed about 1.8 percent for the week.

The ECB cut key rates and expanded its asset-buying plan overnight, but initial positive market reactions reversed after Draghi said that he doesn't anticipate further rate reductions.

"Draghi's signal... sent currency markets into u-turns and, along with fears the ECB may be running out of ammunition, added downward pressure on Asian markets," said Andrew Meredith, co-managing director at Tyton Capital Advisors.

The U.S. dollar fell 0.5 percent to 112.69 yen overnight, squeezing Japan's exporters and scuffing broader sentiment.

Shares of Pansonic Corp and Bridgestone Corp both slipped 2 percent during midmorning trade, while Sony Corp edged down 0.8 percent. Nissan Motor Co Ltd and Honda Motor Co Ltd both declined 1.6 percent.

"The yen volatility we've seen following Draghi's comments is going to temper any big-picture optimism that comes out of the ECB's moves," said Stefan Worrall, director of Japan equity sales at Credit Suisse.

Some traders were concerned that the ECB's surprise moves might limit Bank of Japan chief Haruhiko Kuroda's hand at the next BOJ policy meeting.   Continuación...