Yen jumps, weighing Nikkei; banks pull down Australian index
A falling U.S. dollar pressured stocks in Japan and cast broader concern over equity markets in the region, as turmoil in Washington continued to raise doubts about the Trump administration's ability to make progress on policy.
The WSJ Dollar Index has fallen for five straight sessions, putting it at its lowest level since November. It fell a further 0.1% in Asian trading Wednesday.
The revelation that President Donald Trump shared sensitive intelligence obtained from a close ally with Russian officials at the White House last week has proved to be a major distraction for his legislative agenda, which includes plans to overhaul the health-care system and tax code. In addition, Trump faces questions about why he fired James Comey, the director of the Federal Bureau of Investigation.
With that as a backdrop, the Japanese yen has been the biggest mover of the past 24 hours, rising a full yen against the dollar after pulling back for much of May.
With the dollar back down around Yen112.45 and Treasury yields falling, the Nikkei fell 0.4%. Life insurers, who are large investors in bonds, need higher yields to help cover claims. Life insurance stocks often fall when yields drop.
Dai-ichi Life (8750.TO) was down nearly 4% Wednesday, while T&D Holdings (8795.TO) was 2.5% lower.
"U.S. dollar weakness has been a key feature of the market landscape over the past 24 hours," noted Ric Spooner, chief market analyst at CMC Markets.
In addition, S&P 500 futures were recently down 0.6%.
Australia's benchmark stock index slid 1% as the country's largest banks -- which carry a great deal of weight in the S&P/ASX 200 -- dropped nearly 2%. Prime Minister Malcolm Turnbull said a proposed levy on the country's five biggest banks is "a reasonable requirement" and they can easily afford it.
The tax proposal, released last week as part of the government's budget plan, has pressured the sector's shares. On Wednesday, Turnbull said if the banks "seek to jack up or increase interest rates or charges," the country's competition regulator "will be watching very carefully."
Oil futures were recently down 1% in Asian trading, following U.S. data showing rising inventories. Government data expected later Wednesday was expected to show a decline.
In Shanghai , stocks were recently up 0.1%. Benchmarks in Hong Kong and Seoul were down slightly.
(END) Dow Jones Newswires
May 16, 2017 23:37 ET (03:37 GMT)