Asian stock market rally stalls after Trump tax plan

Stock markets in Asia suffer moderate losses this Thursday morning after Trump’s   tax plan failed to impress the investors.

MSCI’s Asia-Pacific index ex-Japan fell 0.1% after hitting the highest level since June 2015. Japan’s Nikkei index dropped 44 points or 0.25%. Shanghai Composite dropped 0.62%, while South Korea’s Kospi traded flat.

President Trump proposed slashing corporate tax rates to 15% from the current 35%. However, the proposal was once again conveniently short of details, leaving investors disappointed. There is growing concern as to how Trump administration intends to finance the tax cuts.

Tax plan disappointment also ensured the S&P 500 index surrenders early gains to end the day 0.05% lower. The 10-year treasury yield backed off from the two-week high of 2.35% to 2.304%.

The Bank of Japan (BOJ) is expected to keep the key policy tools unchanged today and revise its inflation forecasts lower.  The ECB is set to hold a policy meeting later today, with the focus on a potential QE taper in the months ahead.