Hong Kong, Australia stocks tumble as Asia continues Wall Street’s sell-off; Bank of Japan holds rates.

Asia’s markets continued to suffer from the sell-off on Wall Street, with Hong Kong and Australian stocks falling sharply on Friday morning. However, the Bank of Japan kept its monetary policy unchanged, in line with expectations, and Bitcoin briefly dipped below the $20,000 mark for the first time since mid-January.

Hong Kong and Australian stocks take a tumble.

Hong Kong’s Hang Seng index saw sharp losses on Friday morning, led by consumer cyclical that fell by 3.77%, healthcare stocks that shed nearly 3%, and technology stocks that dropped by 1.56%. JD.com fell 11.04%, while Geely Automobile shed 5.49%.

Australian stocks also suffered, with the S&P/ASX 200 index falling 1.4%. Blue-chip mining stocks BHP Group Ltd and Rio Tinto Ltd were the biggest drags on the index as iron ore prices hit a two-month low.

Bank of Japan holds rates.

The Bank of Japan held its monetary policy unchanged and reiterated its target to keep the 10-year Japanese Government Bond yield around 0%. The central bank also said Japan’s economy is growing despite high commodity prices. This was governor Haruhiko Kuroda’s final meeting in his term.

The move was widely expected, with a Reuters poll predicting that the central bank is unlikely to change its ultra-dovish stance and hold its benchmark interest rate at -0.1% during the two-day meeting.

Bitcoin briefly dips below $20,000

Bitcoin dipped below the $20,000 mark in Asia morning trade for the first time since mid-January, reaching $19,840 before recovering above the psychological threshold. However, the cryptocurrency fell 7.36% in the past 24 hours, according to CoinMetrics, and last stood at $20,115.53. Ethereum also fell 6.92% in the past 24 hours and traded at $1,431.81.

Related Facts

• The Hang Seng index has fallen by over 5% this week, marking its worst week since last October. It follows from Wall Street’s sell-off, which is thought to have been sparked by concerns over rising US bond yields.
• Iron ore prices have fallen by over 10% in the past week as demand from China, the world’s biggest commodity consumer, weakened.
• The Bank of Japan’s ultra-loose monetary policy has been in place for nearly a decade, making it one of the longest-lasting policy experiments in recent history.

Key Takeaway

Asia’s markets have continued their sell-off as concerns over rising US bond yields weigh on investor sentiment. However, as expected, the Bank of Japan’s decision to keep its monetary policy unchanged indicated a commitment to its ultra-dovish stance.

Conclusion

The sell-off in Asia’s markets is a reminder that rising US bond yields and concerns around inflation continue to weigh on investor sentiment. In addition, the Bank of Japan’s policy decision, which marks the end of governor Haruhiko Kuroda’s term, highlights central banks’ ongoing challenge in balancing economic growth with inflation concerns.