Asian stocks were sharply lower Friday after a surprise move by the Swiss National Bank to abandon its efforts to keep its currency artificially cheap shocked the market.
Japan’s Nikkei 225 dropped 2.8 percent to 16,628.06 while South Korea’s Kospi fell 1.2 percent to 1,891.04. Hong Kong’s Hang Seng index was down 0.6 percent to 24,197.01. Australia’s S&P/ASX 200 declined 0.8 percent to 5,289.80. Stocks in Singapore, New Zealand and Taiwan also fell.
The Swiss National Bank, or SNB, said early morning on Thursday that it decided to ditch an increasingly expensive policy to cap the rise of the Swiss franc. After the announcement, the Swiss franc spiked against the euro and the dollar while Swiss stocks tanked. The SNB had prevented the euro from trading below 1.20 francs. But the cost for retaining the policy for the central bank by buying euros or selling francs has risen as the outlook for the euro darkened.
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