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James Hyerczyk
Asian Shares

Shares in Asia were mostly lower on Thursday, led by weakness in Hong Kong. Japan was the next worse performer as investors reacted negatively to the Bank of Japan’s (BOJ) interest rate and monetary policy decision. Stocks were down in Australia also after stronger-than-expected employment data reduced the chances of a February rate cut by the central bank.

At 06:51 GMT, Japan’s Nikkei 225 Index is trading 23864.85, down 69.58 or -0.29%. Hong Kong’s Hang Seng Index is at 27772.84, down 111.37 or -0.40 and South Korea’s KOSPI Index is trading 2196.56, up 1.80 or +0.08%.

In China, the Shanghai Index is at 3019.71, up 2.66 or +0.09% and in Australia, the S&P/ASX 200 Index is trading 6833.10, down 18.30 or -0.27%.

Hong Kong Shares Drop on Profit-Taking

Hong Kong Shares fell on Thursday as investors locked in profits after a recent rally and awaited further details on the “Phase One” Trade deal between Washington and Beijing, and also as investors assessed the outcome of renewed Brexit issues. The sub-index of the Hang Seng Index tracking energy shares dropped 0.9%, while the IT sector fell 1.1%.

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Aussie Gains Trimmed as Prospects for RBA Rate Cuts Dim

Australian investors trimmed earlier gains on Thursday in the wake of the better-than-expected November jobs report. Australian unemployment fell unexpectedly, helped by booming growth in part-time employment.

According to the ABS, hiring increased by 39,000 during the month after seasonal adjustments, nearly triple the 15,000 increased expected by economists. Furthermore, with the participation rate holding steady at 66.0 percent, the boost in hiring was enough to see the national unemployment rate dip 0.1 percentage points to 5.2 percent. Economists were looking for unemployment to remain unchanged at 5.3 percent.

The prospects of another rate cut from the RBA in February dimmed following employment news with the odds of a rate cut at the RBA’s first meeting of 2020 falling to 44 percent from an earlier reported 63 percent.

Nikkei Slips after Bank of Japan Kept Monetary Policy Steady

Stocks in Japan retreated Thursday after the BOJ said:  “Japan’s economy is likely to continue on a moderate expanding trend, as the impact of the slowdown in overseas economies on domestic demand is expected to be limited, although the economy is likely to continue to be affected by the slowdown for the time being.”

Additionally, the BOJ voted 7-2 to keep short-term interest rates at minus 0.1% and long-term rates at around 0%.

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