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Japan's Nikkei falls after Fed decision | |
(about 5 hours later) | |
Japan's Nikkei index fell 2% after the US Fed's decision to keep interest rates unchanged renewed concerns about the strength of the global economy. | |
The Federal Reserve said worries over the global economy, particularly China, had influenced its decision not to raise rates. | |
US shares saw choppy trade after the decision, with both the Dow Jones and S&P 500 closing lower. | |
Japan's Nikkei 225 index closed down 2% at 18,070.21. | |
The US dollar fell sharply against the yen following the Fed's decision, which hit shares in Japanese exporters. Shares in carmakers Toyota and Honda dropped 1.4%, while Panasonic was 2.1% lower. | |
A stronger yen against the dollar is bad news for exporters, because it makes their goods more expensive to sell overseas. | |
Angus Nicholson, market analyst at trading firm IG, said the Fed's decision to hold rates could influence other central banks to ease further. | |
"It is a telling sign for how much the global outlook has deteriorated in the past few months, with the likelihood for even an October hike now sitting at 19.2%," he said. | |
China's home prices | |
Chinese shares were mixed after government data showed that property prices had shown some signs of recovery. | |
New home prices rose for a fourth consecutive month in August, up 0.3% from the previous month, but were down 2.3% from a year ago. | |
The property sector accounts for 15% of China's economic growth, so even minimal gains have a positive impact on the world's second largest economy. | |
The Shanghai Composite index was down 0.5% to 3,071.77, while Hong Kong's Hang Seng index was up 0.1% at 21,884.55 in afternoon trade. | |
In Australia, the S&P/ASX 200 index erased earlier losses to end up 0.6% at 5,178.50. | |
South Korea's benchmark Kospi index finished 1% higher at 1,995.95. |