Asia-Pacific stocks dropped steeply on Monday as negative sentiment continued to weigh on markets.
As of 9.36 a.m. Thai time, The Nikkei 225 in Japan dropped 2.06%. South Korea’s Kospi lost 2.45%.
In Australia, the S&P/ASX 200 declined 1.43%.
Mainland China stocks were comparatively flat, with the Shanghai Composite dropping 0.03%.
Meanwhile, Hong Kong’s Hang Seng index gained 0.37%.
According to Bloomberg, two of the region’s most important currencies, the yuan and the yen, are plunging as a result of a widening gap between the Federal Reserve’s aggressive stance and the dovish stance of China’s and Japan’s governments. The yuan and yen’s decline is making matters worse for everyone and threatens the region’s status as a favored destination for risk investors, even as other Asian countries dip deep into foreign-exchange reserves to cushion the dollar’s harm.
“Currency risk is a bigger threat for Asian nations than interest rates,” said Taimur Baig, chief economist at DBS Group Ltd. in Singapore. “At the end of the day, all of Asia are exporters and we could see a reprise of 1997 or 1998 without the massive collateral damage.”
