U.S. Markets closed

Asia stocks trim losses on BOJ move to spur growth

Pamela Sampson, AP Business Writer

A man looks at the latest Nikkei stock index on display in an electric signboard of a securities firm in Tokyo Thursday, April 4, 2013. Weak economic reports on hiring and service industry growth in the U.S. sent Asian stock markets lower Thursday. (AP Photo/Koji Sasahara)

BANGKOK (AP) -- Asian stock markets trimmed losses Thursday after the Bank of Japan said it would massively expand the money supply to create inflation and lift the country out of its long economic malaise.

At the end of a two-day meeting, the central bank said it would double the money supply through purchases of government bonds and other measures. The announcement pulled Japan's Nikkei 225 stock index out of the red. It was up 0.7 percent to 12,443.70. The dolla rose sharply, to 94.05 yen from 92.84 yen late Wednesday in New York.

It was the first central bank policy meeting under its new governor, Haruhiko Kuroda, who has vowed to do whatever necessary to break Japan's economy out of a deflationary slump. Falling prices have crippled growth in the world's No. 3 economy for the past two decades.

In the U.S. on Wednesday, meanwhile, the Institute for Supply Management said that its index of non-manufacturing activity grew at a slower rate in March, reaching its lowest level in seven months. The index, which covers companies that employ 90 percent of the workforce in the U.S., was driven down by slower hiring and a steep drop in new orders.

A separate report from payroll processor ADP also pointed to slightly weaker hiring in March.

South Korea's Kospi dropped 1.3 percent to 1,957.91 as bellicose rhetoric between North Korea and the U.S. rattled the local market. Early Thursday, North Korea warned that its military has been cleared to attack the U.S. Washington said it was working to defuse the situation.

However, Stan Shamu of IG Markets in Melbourne said the weak economic reports out of the U.S. weighed more heavily on regional stock markets than the fracas brewing in the Korean Peninsula.

"Unless it escalates, I don't think it has too much of an impact," Shamu said. "We'll have to see how the situation develops."

Australia's resource-heavy S&P/ASX 200 lost 0.9 percent to 4,915.40, hurt by drops in commodities prices. Hong Kong and mainland Chinese markets were closed for a public holiday.

Among individual stocks, trading of shares in Australia's Billabong was suspended indefinitely as the troubled swim retailer continues takeover talks with two potential suitors. Japan's Canon Inc. shed 4.1 percent. South Korea's Hyundai Motor Co. declined 5.3 percent.

U.S. stock markets fell sharply on Wednesday on the heels of the weak services and hiring reports. The Dow Jones industrial average closed down 0.8 percent at 14,550.35. The Standard & Poor's 500 fell 1.1 percent to 1,553.69. The Nasdaq composite dropped 1.1 percent to 3,218.60.

Benchmark oil for May delivery was down 2 cents to $94.43 per barrel in electronic trading on the New York Mercantile Exchange. The contract dropped $2.74, or 2.8 percent, to close at $94.45 a barrel on the Nymex on Wednesday. In currencies, the euro fell slightly to $1.2829 from $1.2847 late Wednesday in New York.


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