Major Asian indicators posted another decline to 2.9% today. In China, the Shanghai Composite and the Shenzhen Composite lost 0.64% and 0.69% respectively. The KOSPI decreased by 0.74%. All other indices lost more than 1%, with the Hang Seng Index falling by 1.31% in Hong Kong, the Australian S&P/ASX 200 decreasing by 1.52% and Japan's Nikkei 225 dropping by 2.9%.
Market participants continued to analyze the results of the last Fed meeting of 2022. The US central bank increased the interest rate by 50 basis points and also signaled that it would not ease monetary policy in the near future until inflation begins to decline steadily. At the same time, a permanent rate hike could have a negative impact on the global economy.
Meanwhile, in Japan, the Bank of Japan decided to leave interest rates unchanged at its December meeting. The short-term interest rate remained at -0.1%, while government bond yields remained at around zero. The BOJ also increased the target range of government bond yields from +-0.25% to +-0.5%. As a result of such decision, the bond yield increased and reached 0.4%. This also gave support to the Japanese yen.
The stronger yen brought down stocks of Japanese carmakers, as most of their revenues come from abroad. For example, Mitsubishi Motors fell by 8.3%, Hino Motors lost 5.6%, Nissan Motor decreased by 5.4%, and Mazda Motor and Subaru declined by 5.3% and 5.2% respectively.
In addition, Sony Group lost 4.2%, Advantest slid down by 3.5%, and Nintendo fell by 1.2%.
At the same time, other Japanese stocks advanced on Tuesday. Mitsubishi UFJ Financial Group, Inc. gained 6.2%, Dai-ichi Life Holdings, Inc. rose by 8.5%, Chiba Bank, Ltd. climbed by 6%, Sumitomo Mitsui Financial Group, Inc. went up by 5.6%, and Mizuho Financial Group, Inc. gained 4.2%.
In China, the interest rate also remained unchanged at 3.65%, matching expectations. The rate has remained at this level for the past four months.
The worst performing Chinese stocks were Country Garden Holdings, which fell by 7.5%, Longfor Group Holdings, which dropped by 6.5%, Sunny Optical Technology Group, which declined by 5.4%, and Geely, which lost 5%.
Baidu and Alibaba each lost 4.5%, and Meituan declined by 3.5%. Xiaomi and JD.com fell by 3% and 2.9% respectively.
On the KOSPI, shares of Samsung Electronics fell by 1.5%, while Hyundai Motor fell by 1.6%.
According to the statement of the Reserve Bank of Australia, even more tight monetary policy measures may be adopted next year, such as bigger rate hikes. It is assumed that interest rates could be raised by more than 25 points already at the next meeting in February. The rate was hiked by 0.25% in early December after four consecutive 0.5% moves earlier this year.
Shares of Australia's largest companies, BHP and Rio Tinto, fell by 1.6% and 1.2%, respectively.