The yen strengthened for the first time in four days, rising 0.9 percent to 113.01 per dollar. It’s risen 7.2 percent in February, more than double the gain of any other major currency.
China’s yuan declined 0.1 percent, retreating for a seventh day as China’s central bank lowered the currency’s reference rate after upbeat U.S. economic data gave a lift to the dollar.
Shares in China dropped sharply Monday as China’s central bank guided the yuan to its weakest level in three weeks, just after Chinese officials at a meeting in Shanghai worked hard to dispel worries about China’s economic strategy.
The losses in Chinese shares came after China’s central bank guided the Chinese yuan weaker for the fourth straight session at 6.5452 to one U.S. dollar on Monday, compared to 6.5338 on Friday. The yuan reached 6.5490 to one U.S. dollar, marking its weakest level in the onshore market since Feb. 5. The currency can trade in a 2% up or down limit of the bank’s daily fixing onshore.
The Shanghai Composite Index was down 2.86% at 2687.98, having fallen more than 4% in early trading. The benchmark is down about 48% from its June peak.
Meanwhile, the Shenzhen Composite Index was down 5.37%. Hong Kong’s Hang Seng Index fell 1.33%
"Investors feel disappointed over the lack of good news from the G-20, while the yuan has started to weaken again," Steve Wang, chief China economist at Reorient Financial Markets Ltd said in Hong Kong. "There are signs of panic buying in China’s property market as prices in large cities continue to rise. A hazy economic outlook prompted some people to sell shares and buy homes, while many stocks remain overvalued."
Prices of new homes rose in 38 cities last month, one fewer than in December. Prices fell in 24 cities and were flat in the remaining eight, compared with 27 and four cities in December, respectively.
Shenzhen again led as month-on-month price increase sped from December’s 3.2 percent to a gain of 4.1 percent last month. Shanghai was next with a 2.6 percent gain followed by Nanjing where prices rose 2.5 percent, the bureau’s data showed.
Japan’s Nikkei Stock Average was down 1.0%. For the month, the Nikkei stumbled 8.5 percent, a third straight monthly decline and the biggest one since May 2012.
Japanese stocks dropped on Monday as the dollar slipped against the yen and investor sentiment was hit by falls for Chinese shares.
Reference: Reuters, Bloomberg, MarketWatch, Shanghai Daily
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