Asian stocks falter, oil in another price drop

Markets in Asia opened lower on Thursday as investors dealt with the seemingly diminishing ability of major central banks to stimulate growth, while a dip in crude oil aggravated already heightened risk aversion.

Japan’s Nikkei .N225 went down 0.66 percent and the Australian stocks shed 0.1 percent. South Korea’s Kospi .KS11 was little changed.

The heavy Asian start followed a futile performance on Wall Street where the Dow .DJI lost 0.2 percent and the S&P 500 .SPX shed 0.1 percent, with confusion over future interest rate hikes and lower energy shares weighing.

In the currency market, the dollar trimmed down against a basket of currencies, with the dollar index at 95.372, compared to levels near 95.662 touched during Asian hours.

Japanese yen strengthened against the dollar, trading at $102.35 as of 6:42 am HK/SIN, compared to Wednesday’s afternoon local time with levels near 103.29.

Then Australian dollar traded slightly higher at $0.7479, compared to its last close at $0.7466, but lower levels above $0.7500 the pair traded at in the previous week.

U.S. crude futures slipped 2.9 percent to $43.58 in the U.S. session, after dropping 3 percent on Tuesday. Global benchmark Brent crude fell 2.7 percent.

Fast-food meals becoming a headache for Japanese Central Bank

Japan’s fast-food chains have lowered the price of their menus over the last 6 months, with McDonald’s Japan unit, Burger King Japan, and Yoshinoya Holdings Co. offering cheaper deals and lunchtime specials.

The lowering of prices became a worrying sign for the central bank as it tries to bring about inflation.

McDonald’s rolled out a new weekday lunchtime combo set earlier this month. The combo set includes a burger and a small-sized drink for 400 yen ($3.90). Burger king introduced a 490 yen meal set complete with a burger, small fries and a drink. Beef bowl chain Yoshinoya in April brought back its pork bowl priced at 50 yen cheaper than its beef counterpart. Sushi restaurant chain Kappa Create Co. began a campaign in March to cut the price on its 108 yen sushi dishes to 97 yen on weekdays.

“Gasoline and other energy-related prices are falling, which makes it easier for the restaurant sector to lower their prices as well,” said by Hiroshi Miyazaki, senior economist at Mitsubishi UFJ Morgan Stanley Securities Co. “ I suspect the BOJ, going into the September meeting, would be thinking about how it can bring back consumers who are starting  to develop a deflationary mindset.”

Mitsushige Akino, an executive officer at Ichiyoshi Asset Management said that deflationary pressures in the fast food industry will likely persist in the predictable future. Restaurants will thus face a period of cut throat competition.