Yen soars, Asia stocks hit as Bank of Japan frustrates

Hong Kong - The yen soared on Friday and Asian stock markets slipped as the Bank of Japan's small adjustments to its stimulus programme disappointed traders who had expected a huge boost to its arsenal.

After weeks of anticipation that the central bank would pump fresh cash into the economy, policymakers said only that they would boost its exposure to riskier investments, leaving a massive ¥80trn annual asset-buying programme unchanged.

"The BoJ decision failed to meet the market's high expectations," Khoon Goh, head of Asia research at Australia & New Zealand Banking Group in Singapore, told Bloomberg News.

He added that while governor Haruhiko Kuroda indicated the bank could unveil fresh measures at its September meeting, "overall this is a huge disappointment for markets".

The news sent the dollar tumbling to below ¥103 from ¥104.20 earlier in the day, and well off the levels above ¥107 touched last week, while the euro fell to ¥114.29 from ¥116.60.

The Nikkei stock index was also hit, sinking 1.5% in the afternoon.

Among other markets Sydney fell 0.3%, Seoul sank 0.1% and Singapore tumbled 1.1%. Hong Kong fell 0.8% and Shanghai sank 0.1% at the break, before the announcement.

The announcement came days after the government in Tokyo launched a fresh programme worth ¥28trn to kick-start the Japanese economy.

World markets soared in July as Britain's shock vote to leave sparked promises of support from central banks and governments in a bid to fend off a feared hit to the global economy.

The need for more support was highlighted on Friday by data showing core Japanese consumer prices fell for a fourth straight month in June, the latest sign that Prime Minister Shinzo Abe's drive fire inflation is struggling to gain traction.

On oil markets both main contracts were headed for a seventh straight day of losses as worries about a global supply glut return to the fore.

Brent and West Texas Intermediate each lost 0.3% and were headed towards the $40 mark, well down from the 2016 peaks above $50 at the start of June as the crucial US holiday driving season comes to an end and temporary disruptions to output in Canada and Nigeria ease.