Markets were lower Wednesday on the news that the Bank of Japan had moved to weaken its currency against the U.S. dollar, and the price of oil tumbled.
The Toronto Stock Exchange's S&P/TSX composite index fell 36.48 points, or 0.3 per cent, to 12,156.51.
The Canadian dollar was trading at 97.13 cents U.S., down 17 basis points.
On the New York Mercantile Exchange, oil fell $1.35 cents U.S. to $75.45 U.S. a barrel. Gold fell 70 cents U.S. to $1,271 U.S. an ounce.
"It seems that rumours of another impending round of quantitative easing (from the U.S. Federal Reserve) did the rounds with the obvious impact wrought on the U.S. dollar," said Sacha Tihanyi, chief currency strategist at Scotia Capital said in a note.
In the U.S. the Dow Jones industrial average fell 11.84 points, or 0.11 per cent, to 10,514.65, while the Nasdaq composite index was down 6.85 points, or 0.3 per cent, to 2,282.92.
The Bank of Japan intervened in foreign exchange markets to weaken the yen early Wednesday — its first intervention in currency markets in six years.
"Early in the Japanese trading session, the yen traded to a new 15-year high versus the U.S. dollar (to 82.88 yen), and that appears to have triggered the intervention," said Benjamin Reitzes, economist at BMO Capital Markets. The move sent the yen tumbling to a two-week low.
Mixed data out of the U.S. and Canada was shrugged off by markets in the wake of the news out of Japan.
In Canada, manufacturing sales fell 0.9 per cent during in July to $44.3 billion, Statistics Canada said Wednesday. Most economists had expected factory sales to rise 0.2 per cent in July.
"With U.S. economic growth slowing in the second half of 2010, exports will not contribute to the growth of the manufacturing sales in the coming months," Shahrzad Mobasher Fard, economist at TD Bank Financial said in a note.
The New York Federal Reserve's Empire State general business conditions index fell to 4.14 in September from 7.1 in August — the lowest reading since July 2009 and was below expectations for a reading of eight.
And import prices in the U.S. increased a more-than-expected 0.6 per cent in August after rising by a revised 0.1 per cent in July, the Labor Department said Wednesday. Reuters' analysts had forecast import prices rising 0.3 per cent in August.
Markets were mixed overseas. London's FTSE lost 20.34 points, or 0.37 per cent, to 5,547.07 at midday. In Frankfurt, Germany's DAX fell 31.01 points, or 0.49 per cent, to 6,244.4, and the Paris CAC fell 32.69 points, or 0.87 per cent, to 3,741.71.
The Nikkei in Japan closed up 217.25 points, or 2.34 per cent, to 9,516.56, while Hong Kong's Hang Seng rose 29.60 points, or 0.14 per cent, to 21,725.64.
On Tuesday, the S&P/TSX composite index closed up 43.13 points, or 0.36 per cent, to 12,192.98. The Dow was down 17.64 points, or 0.17 per cent, to 10,526.49. The Nasdaq composite index gained 4.06 points, or 0.18 per cent, to 2,289.77.
