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Thursday, July 12, 2012

Asian market buzz today

HONG KONG: Asian markets plunged Thursday on growing fears of a regional slowdown after South Korea unexpectedly cut interest rates, and Japan's central bank's  major policy changes failed to boost growth.

Tokyo fell 1.48 percent, or 130.99 points, to end at 8,720.01, while Seoul closed down 2.24 percent, or 41 points, at 1,785.39.

Hong Kong stocks closed 2.03 percent, or 394.76 points, lower at 19,025.11, amid concern over the Chinese economy. But Shanghai ended up 0.46 percent, or 10.11 points, at 2,185.49.

 After weak June jobs figures, Sydney fell 0.70 percent, or 28.5 points, to end at 4,068.0 

By cutting its key interest rate 25 basis points to 3.00 percent, South Korea's central bank joined an international drive to ease the impact of the euro-zone debt crisis that threatens export-dependent Asian economies.

The European Central Bank and China's central bank cut their rates last week, while Brazil on Wednesday slashed its rate to a record low.

Surprise element is the Bank of Japan which took no major steps despite lowering its growth forecast for the fiscal year, to 2.2 from 2.3 percent,

Following a two-day policy meeting, the bank said it would keep rates steady at zero to 0.1 percent and fine-tuned a 70 trillion yen ($880 billion) asset-purchase programme but kept the size of the policy tool steady.

The bank said it would reduce the amount of fixed-rate loans it offers by five trillion yen and increase the purchase of treasury discount bills by the same amount, but analysts said the move would have little effect.

Asian stocks slipped very early in trade, following a lead in the US after the minutes of the Federal Reserve's June meeting showed the rate-setting committee split on whether to provide more stimulus.

Several top policymakers urged the central bank to look at new tools to bolster the financial system amid a weak recovery, but the minutes also showed the Fed split on how, when and if to provide more stimulus.

The Dow Jones Industrial Average landed to 0.38 percent.

On currency markets, the euro slipped early in European trade. It bought $1.2217 and 96.90 yen, from $1.2238 and 97.58 yen in New York late Wednesday.

The dollar goes weak to 79.31 yen from 79.74 yen in New York.

Gold was worth $1,566.81 an ounce at 0930 GMT, compared with $1,578.20 late Tuesday.

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