Asian Markets Mixed as Fed ends Emergency Measures

Asian shares were mixed Monday as the U.S. Federal Reserve’s announcement shook sentiment that it would end some emergency measures put in place last year to help the financial industry deal with the pandemic.

Meanwhile, the Turkish lira plunged early Monday, falling about 17%, after the country’s president, Recep Tayyip Erdogan, removed central bank head Naci Agbal from his post on Saturday. The currency was trading at about 7.8 lira to the dollar on Monday morning.

Japan’s benchmark Nikkei 225 dropped 2.1% in afternoon trading to 29,174.15 while South Korea’s Kospi lost 0.1% to 3,035.46.

Australia’s S&P/ASX 200 gained 0.7% to 6,752.50. Hong Kong’s Hang Seng shed 0.2% to 29,941.21, while the Shanghai Composite jumped 1.1% to 3,443.44.

Major Japanese stocks fell nearly across the board, including automakers like Toyota Motor Corp. and Honda Motor Co., whose earnings get a boost from a healthy U.S. economy. Toyota’s shares fell 3.3% while Honda’s lost 3.6%.

“Asia markets had seen a mixed commencement to the week with the rising bond yields once again weighing on sentiment. The see-sawing of the influence between rising bond yields and improving economic recovery prospect may well remain for the region going into the end of March,” Jingyi Pan, Senior Market Strategist, IG.

The move last week by the Fed last week not to increase interest rates will restore some of the capital requirements for big banks that were suspended in the early months of the coronavirus pandemic to give banks flexibility.

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Additionally, the prevailing coronavirus pandemic continues to cause alarm in the region, with some countries halting the vaccine rollouts on concerns about the side effects caused by the vaccine.

Asian Markets Currencies and Oil

The U.S. dollar inched up against its peers’ basket to 108.80 while the euro exchanged hands at $1.1892, up from $1.1880.

Oil prices extended losses on Monday, amidst concerns that European lockdowns may slow down the expected recovery on oil demand. Brent crude was down 34 cents, or 0.5%, at $64.19 a barrel by 0608 GMT while the U.S. oil was off by 21 cents, or 0.3%, at $61.21 a barrel.

 Both contracts fell by more than 6% last week.

Read also: Asian Stocks Mixed as U.S Bond Yeild Continue to Rise.