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Asia slow ahead of holiday
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February 15, 1999: 4:52 a.m. ET
Tokyo edges higher; Singapore, Hong Kong slip before early close for New Year
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LONDON (CNNfn) - Disappointment with the Bank of Japan for its failure to tackle rising long-term interest rates only served to heighten the apathy in Asian markets ahead of Chinese New Year.
Both Hong Kong and Singapore were little changed after quiet half-day trading sessions. Three of the region's smaller markets, Kuala Lumpur, Seoul and Taipei, were closed for the day.
In Tokyo, the Nikkei 225 ended the day up just slightly at 14,054.72, a rise of 0.54 percent, lifted by a rally in banking stocks.
The sector index added just over 1 percent on the back of an announcement by Japanese regulators to inject some $65 billion of public funds into the troubled banking sector to aid its restructuring. Speculation that the sector is ripe for consolidation also helped sentiment.
Overall, though, investors were disappointed by the central bank's refusal to intervene directly to halt the rise in long-term interest rates.
The BoJ's policy board rejected political pressure Friday to cap rising long-term rates by buying more Japanese government bonds (JGBs). Instead, it opted to cut a key short-term interest rate, chopping 10 basis points off the overnight short-term call rate to 0.15 percent.
JGB yields rose and the dollar dipped against the yen as the markets expressed their dissatisfaction.
In Hong Kong, the Hang Seng index closed down 0.24 percent at 9,402.39 after a shortened trading session. The weakened pre-holiday sentiment came in sharp contrast to the strong rally late Friday. The heat came out of the market as investors re-assessed the news that the government would resume land sales.
The market re-opens Friday.
Concerns over the direction of U.S. monetary policy overshadowed trading in both Hong Kong and Singapore, which also had a half-day's trading with thin volume. The Straits Times index of leading shares ended the truncated session up 0.46 percent at 1,361.15.
In Sydney sentiment was also weak, with investors held back by the plunge on Wall Street Friday. The All Ordinaries index fell 0.4 percent to 2,877.8, buoyed by some buying in the mining sector, which ended the day up 0.4 percent.
Elsewhere, the Indonesian market ended the day down just under 1 percent at 344.96 and the Bangkok stock exchange closed 0.71 percent lower at 396.92. Manila fell half a percent to 1,910.30.
--from staff and wire reports
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