By V. Phani Kumar, MarketWatch
HONG KONG (MarketWatch) -- Asian stocks swooned Thursday after
uncertainty over U.S. monetary policy led to more losses on Wall
Street, with Japanese shares plunging toward their sixth loss in
seven sessions as a strengthening yen hurt exporters.
Leading the deep losses suffered across most of the region, the
Nikkei Stock Average plummeted 6.2% to 12,466.48 -- dropping back
below the 13,000-point level it had recaptured in early April but
briefly lost earlier this month. The broader Topix shed 4.9%.
The declines came as the U.S. dollar fell under the Yen95-level,
and after U.S. stocks finished lower for a third straight session
overnight on concerns the Federal Reserve could taper down its bond
purchases.
The dollar's tumble against the yen "will put regional markets
under pressure, but it may also [force] the U.S. Fed to reconsider
its tapering plans in the face of a global sell off," said Kim Eng
Securities director of sales trading Andrew Sullivan.
The losses on Wall Street reinforced "the notion that the market
is similar to a junkie who needs a constant fix, which in this case
comes in the form of monetary stimulus," said CMC Markets sales
trader Miguel Audencial.
"Even a slight indication or the speculation that this stimulus
will be scaled down may ignite a sell-off," Audencial said.
Meanwhile, China's Shanghai Composite tumbled 3.3% as the
markets reopened for the first time this week after a string of
holidays, giving investors a chance to react to a string of
downbeat economic data released over the weekend, including the
monthly trade and inflation figures.
Hong Kong's Hang Seng Index skidded 3.1%, and South Korea's
Kospi lost 0.9%.
Australia's S&P/ASX 200 fell 1.1% to enter so-called
correction territory -- having dropped more than 10% from the highs
reached in May. The benchmark remained in negative territory
despite official data showing an unexpected improvement in
employment data for May.
Stock movers
In Japan, stocks found little respite as the U.S. dollar
(USDJPY) fell under the Yen95 level, raising more fears about the
earnings outlook of companies with a significant international
presence.
Shares of Fast Retailing Co. (FRCOY) skidded 8.1%, Mazda Motor
Corp. (MZDAY) slumped 4.6%, and Sharp Corp. (SHCAY) lost 7.4%.
"The combination of elevated risk aversion and disappointment
over recent policy announcements, in particular the lack of detail
about Prime Minister [Shinzo] Abe's 'third arrow,' has prompted
ever more upside for the [yen]" said Crédit Agricole forex strategy
chief Mitul Kotecha.
Property developers suffered heavy losses in China. Gemdale
Corp. slumped 5.7% in Shanghai, while China Resources Land Ltd.
(CRBJF) skidded 4.7% in Hong Kong.
In Sydney, mining stocks came under pressure, with BHP Billiton
Ltd. (BHP) lower by 2.4%, and Fortescue Metals Group Ltd. (FSUMY)
sliding 2.1%.
Rio Tinto Ltd. shares (RIO) declined 1.9%. The company said it
plans to sell its Eagle nickel and copper project to Lundin Mining
Corp.
Subscribe to WSJ: http://online.wsj.com?mod=djnwires