Japan business mood sinks on China anxiety, weak demand — Reuters Tankan

BANK OF JAPAN: Japan’s central bank decided to not change its policy calling for 80 trillion yen ($666 billion) in annual asset purchases by the central bank, to help spur inflation and stimulate growth. But Kuroda did not give any clue on the possibility of further easing, telling a press conference that Japan’s economy continued to recover moderately and that he expected exports to rise gradually.

LONDON, Sept 15 (Reuters) – The yen rose on Tuesday after the Bank of Japan held off on expanding its stimulus programme, with Governor Haruhiko Kuroda maintaining his optimism about the country’s economic outlook.

A shift in the BOJ board’s composition means if Kuroda were to pull the trigger, he could count on more votes than last October, when his unexpected proposal to expand stimulus won by a razor-thin margin.

Many economists believe that volatile global markets and increasing evidence of slowing momentum in China will prevent the United States central bank from raising interest rates for the first time since 2006.

Asian shares edged up on Monday in cautious trade, brushing off soft economic data from China, as investors looked to whether the U.S. Federal Reserve is confident enough to raise interest rates for the first time in a decade.

Although prospects of the domestic economy face more uncertainty, the BoJ expects domestic demand, including corporate investment and household spending, are likely to remain solid on the back of robust earnings and wage growth.

The Shanghai Composite Index.SSEC was down 2.5 percent and the CSI300 index.CSI300 was 2.9 percent lower in thin trading, with many investors sidelined amid concerns over the market’s direction after a 40 percent crash over the summer prompted the government to launch a massive rescue package.

On Tuesday Shanghai finished 3.52 percent down, the heaviest loss since late last month and extending a 2.67 percent fall suffered Monday. Japan’s Nikkei 225 lost 1.6 percent, and South Korea’s Kospi lost 0.5 percent.

Shares in China were also lower Tuesday, as forced liquidation pressure dented investor confidence.

ENERGY: US crude fell gained 35 cents to $44.35 a barrel in electronic trading on the New York Mercantile Exchange.

The Japanese currency clung to a 0.2 percent gain versus the euro at 135.73 yen. Apple climbed $1.10, or 1 percent, to $115.31.

New Zealand’s benchmark S&P/NZX 50 index rose 0.13% to 5,672.98 points this afternoon in Wellington.

He predicted Japan s economy, the world s third-largest, would return to growth in the current quarter, arguing that the 0.3 percent shrinkage in April-June was a “one-off” case.