Asian Shares Stronger With Nikkei at 10-Month High
25 November 2016 - 3:00PM
Dow Jones News
Asian share markets were broadly higher early Friday, with
Japan's Nikkei leading after the yen hit a fresh eight-month low
against the dollar, helping boost the competitiveness of the
country's exports.
The Nikkei Stock Average rose 0.8% to fresh 10-month high.
Elsewhere in the region, Australia's S&P/ASX 200 was up 0.5%,
Hong Kong's Hang Seng Index added 0.2%, while the Shanghai
Composite Index was down 0.8%.
The U.S. dollar-yen currency pair rose further on Friday, amid
subdued trading volumes over the U.S. Thanksgiving holiday.
Expectations of higher inflation in the U.S. under the Donald Trump
administration are driving the greenback's broad strength, noted
Seiichi Tanaka, head of foreign exchange spot trading at Mizuho
Bank.
A weaker yen makes Japanese exports competitive and increases
the value of overseas profits when they are repatriated. Among key
export stocks, Nissan Motor surged 4.9% and Honda Motor gained 4%.
Electronics giant Sony added 0.5%, while videogame maker Nintendo
rose 0.9%.
Also, latest consumer price data in Japan showed deflation there
was slowing. The core consumer price index there fell 0.4% from a
year earlier in October, adjusted for fresh food and energy prices,
according to data released Friday. The reading marked the eighth
consecutive monthly decline, but was smaller than the 0.5% drop in
the previous month.
Meanwhile, strength in global commodity prices is helping drive
share gains in Australia. On Thursday, copper prices hit a 17-month
high as bullish expectations for manufacturing spending outweighed
the impact of the U.S. dollar hitting multi-year highs.
Among key resource shares in Australia, BHP Billiton rose 2.7%,
while Rio Tinto added 1.8%, and Fortescue Metals Group added
0.3%.
"There is strong momentum in copper, coal and other
commodities," said Castor Pang, head of research at Core
Pacific-Yamaichi International, noting that the surge in prices has
been due to speculation. "It seems that investors believe there may
be very strong demand from the U.S."
Expectations that a deal to cut global oil output will be
finalized next week continued to help drive energy stock prices,
with Woodside Petroleum and Santos Ltd. in Australia adding 1.6%
and 0.7%, respectively. In Japan, shares of Inpex Corp. rose
0.4%.
Brent, the international crude oil benchmark, was down 0.1% in
Asian trade but was hovering around $49 a barrel, ahead of the
meeting of the Organization of the Petroleum Exporting Countries
next week. Iraq has indicated that it would be taking part in any
agreement to freeze production.
Still, gains in Asian markets were capped by reduced volumes and
a lack of trading cues, with U.S. markets shut for Thanksgiving.
"Whenever there are holidays in the U.S., trading is expected to be
thin (in Asia)," said Alex Furber, a senior client services
executive at CMC Markets.
In South Korea, the Kospi was mostly flat, last up 0.05%. The
market's underperformance came as consumer confidence in the
country fell to the lowest in more than seven years in November, a
Bank of Korea survey showed Friday.
The market will also be watching for the release of key Asia
data later Friday, including Malaysian consumer prices and
Singapore industrial production data, both for October, while
Taiwan will release third-quarter final economic output data.
--Kosaku Narioka, Takashi Nakamichi, Kwanwoo Jun and Katherine
Dunn contributed to this article.
Write to Kenan Machado at kenan.machado@wsj.com
(END) Dow Jones Newswires
November 24, 2016 22:45 ET (03:45 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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