Japan Shares Extend Gains
06 September 2016 - 2:10PM
Dow Jones News
Shares were mixed in Asia early Tuesday, though strength in
Japanese banking stocks and a weaker yen helped boost the Nikkei
Stock Average.
The Nikkei was up 0.3%, after closing at its highest level since
May on Monday, and building on last week's 3.5% gain.
The yen was recently down 0.4% against the dollar, which
remained weak after the release of weaker-than-expected U.S. jobs
data on Friday, reducing the likelihood of an imminent interest
rate increase by the Federal Reserve. A weaker yen helps boost the
competitiveness of Japanese exports.
Meanwhile, banking stocks drove gains on the Nikkei amid
expectations that the Bank of Japan may cut back on longer-term
bond buying at its next meeting, thus boosting bond yields.
Mitsubishi UFJ Financial Group was up 0.6%, Mizuho Financial Group
gained 0.8%, and Sumitomo Mitsui Financial Group was trading up
1.9%.
"The Japanese banking sector has been doing very well of late,"
said Angus Nicholson, a market analyst at IG. "In the lead-up to
the BOJ meeting on Sept. 21, there's a lot of speculation that the
BOJ is going to do a major recalibration of their [qualitative and
quantitative easing] policy."
Japanese banks have been some of the biggest victims of the
BOJ's monetary easing and negative rates policy. They claim that
their profits were suffering amid very low yields on all government
bonds.
In the Philippines, the stock market benchmark PSEi was the
region's biggest decliner, falling 0.7%, after U.S. President
Barack Obama abruptly canceled a first meeting with Philippine
leader Rodrigo Duterte in a rare diplomatic rupture. Analysts point
to concerns that rising tensions between the two close allies could
impact future trade deals.
The meeting was called off following bombastic comments from the
Philippine leader on Monday demanding that their discussion not
touch on his approach to human rights and referring to the U.S.
leader in Tagalog with an expression widely translated to mean "son
of a bitch."
The decline in Philippine stocks came even as data Tuesday
showed inflation in the country slowing unexpectedly in August,
providing the central bank plenty of scope to keep monetary policy
supportive of stronger economic growth.
Elsewhere in the region, markets lacked direction from U.S.
indexes as the country's exchanges were closed Monday for the Labor
Day holiday. Australia's S&P/ASX 200 was down 0.4%, Hong Kong's
Hang Seng Index was up 0.1%, the Shanghai Composite fell 0.4% and
the South Korean Kospi was about flat.
Looking ahead, investors will be watching for news from the
annual summit of the Association of Southeast Asian Nations, which
kicks off Tuesday in Laos and could move stocks in the region.
More broadly, uncertainty on the U.S. interest rate outlook may
continue ahead of speeches by Federal Reserve officials, including
one by Federal Reserve Bank of San Francisco President John
Williams, later this week.
Kosaku Narioka and Takashi Nakamichi contributed to this
article.
Write to Ese Erheriene at ese.erheriene@wsj.com
(END) Dow Jones Newswires
September 05, 2016 23:55 ET (03:55 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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