Asian stocks close lower in lead up to Bank of Japan's policy decision

  • Asian stocks closed lower on Monday, tracking losses seen on Wall Street that had been led by tech.
  • The yen was steady, with the Bank of Japan's policy statement due on Tuesday.
  • Apart from earnings, investors also awaited major events due in the week, including the Federal Reserve's meeting later this week.

Asian stocks closed lower on Monday, with investors wary as the Bank of Japan and other central banks hold policy meetings this week.

The Nikkei 225 declined 0.74 percent, or 167.91 points, to close at 22,544.84, with falls in utilities, energy and pharmaceuticals leading the losses for the day. The broader Topix closed lower by 0.43 percent, with 21 of its 33 subindexes finishing in negative territory.

Elsewhere, the Kospi pared steeper losses from earlier to close lower by 0.06 percent at 2,293.51 as investors digested earnings releases. Losses in large cap technology names offset gains seen in automakers and manufacturing sector plays, with index bellwether Samsung Electronics down 0.85 percent before the release of earnings due on Tuesday.

Symbol
Name
Price
 
Change
%Change
NIKKEI
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HSI
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ASX 200
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SHANGHAI
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KOSPI
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CNBC 100
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Chinese stocks also finished the day lower, with the Shanghai Composite reversing moderate gains seen in the morning to end lower by 0.12 percent at 2,870.06. The smaller Shenzhen Composite pulled back by 1.39 percent by the end of the day while the blue-chip CSI 300 index, which tracks the biggest stocks traded on the mainland, finished lower by 0.16 percent.

Meanwhile, in Hong Kong, the Hang Seng Index came under pressure, giving up 0.55 percent by 3:00 p.m. HK/SIN. The information technology dropped 2.23 percent by 3:00 p.m. HK/SIN, dragging on the index as heavyweight Tencent fell 2.36 percent ahead of the session's close. The consumer goods sector lost 1.8 percent an hour before the market close, contributing to the benchmark's overall declines.

Down Under, the S&P/ASX 200 eased 0.35 percent to 6,278.40. Losses were led by the drop in the health care subindex, while heavily weighted "Big Four" banks all finished lower.

MSCI's index of shares in Asia Pacific excluding Japan slipped 0.4 percent in afternoon trade.

The negativity in the Asian session followed declines in U.S. stocks seen on Friday as earnings news stateside overshadowed the release of solid second-quarter U.S. gross domestic product data, with tech leading the losses.

Intel shares fell in the previous session on the chipmaker announcing delays for next generation chips while Twitter sank after reporting a drop in monthly active users. That contributed to a second day of steep losses for the tech sector stateside after the plunge in Facebook's stock on Thursday.

Meanwhile, U.S. second-quarter GDP grew at 4.1 percent, in line with expectations, with a jump in consumer spending and business investment contributing to the figure. That was the quickest pace of growth since 2014.

Central banks in spotlight

Against the yen, the dollar was mostly steady at 111.08 at 2:53 p.m. HK/SIN, ahead of the Bank of Japan's statement on monetary policy due on Tuesday. The central bank began its policy meeting on Monday.

"Our base case scenario is for the BOJ to make no policy change. But there is increasing speculation the BOJ may tweak its yield curve control settings in part because of lower bank profitability and muted inflation in Japan," Elias Haddad, senior currency strategist at Commonwealth Bank of Australia, wrote in a note.

Stateside, the Federal Reserve's Federal Open Market Committee will embark on its two-day meeting on Tuesday, although not much is expected to result from that. Still, investors are keeping watch for clues as to whether the central bank will raise rates for the fourth time this year in December.

The dollar index, which tracks the greenback against a basket of peers, traded sideways at 94.671.

On the commodities front, Brent crude futures added 0.22 percent to trade at $74.45 per barrel and U.S. West Texas Intermediate crude rose 0.49 percent to trade at $69.03.

In individual movers, Hotel Shilla was up 1.63 percent after rising more than 6 percent earlier in the session. The company reported a 303 percent increase in operating income after the market close on Friday.

Over in China, shares of Changsheng Biotechnology dropped 5 percent amid public outcry over a recent vaccine scandal. The pharmaceuticals company reportedly fabricated manufacturing and test records, Reuters reported, citing state media. Other Chinese pharmaceuticals names also saw declines, with the CSI 300 health care index falling almost 3 percent by the end of the session.