BackAsian markets mixed, dollar taps five-year high
Despite weaker yen, Japan's Nikkei sank after jumping more than 4% to a six-year high over the previous three sessions
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Hong Kong: Asian shares were mixed on Friday and the dollar touched a new five-year high against the yen after the Federal Reserve said it would start to wind down its stimulus programme next month.
Despite the weaker yen, Japan’s Nikkei sank after jumping more than 4% to a six-year high over the previous three sessions.
Tokyo closed flat, edging up 11.20 points to 15,870.42, Sydney rose 0.21%, or 63 points, to 5,265.2 and Seoul added 0.39%, or 7.70 points, to 1,983.35.
Hong Kong ended 0.33% lower, giving up 76.57 points to 22,812.18 while Shanghai tumbled 2.02%, or 43.00 points, to 2,084.79 with traders growing concerned about a lack of liquidity in the market as inter-bank borrowing rates climb to highs not seen since a cash crunch crisis in June.
Global investors broadly welcomed the Fed’s decision Wednesday to reduce its bond-buying by a modest $10 billion a month to $75 billion while pledging to keep interest rates at record lows for the foreseeable future.
The move indicated the central bank is confident the world’s number one economy is becoming strong enough to stand on its own feet as it recovers from the financial crisis.
On Wall Street Thursday the Dow edged up 0.07% to another record but the S&P 500 dipped 0.06% after hitting an all-time high on Wednesday, while the Nasdaq lost 0.29%.
All three indexes had surged on Wednesday after the Fed announcement.
While the cut will mean less cash sloshing around the financial system and, therefore, a likely withdrawal of funds from emerging economies, analysts said the fact it was so small provided investors with some comfort.
The dollar continued to benefit Friday from the so-called taper, touching 104.59 yen in early Tokyo trade—a high not seen since early October 2008.
It eased a tad to sit at 104.47 yen in the afternoon, still up from 104.22 yen in New York Thursday.
“The yen doesn’t seem to stand much of a chance these days after the Fed tapered stimulus," said Joe Manimbo, senior market analyst at Western Union Business Solutions.
“With the Fed’s most accommodative days likely in the rear-view mirror, Japanese authorities appear poised to ramp up stimulus next year to keep one of the world’s biggest economies from unravelling."
There is growing speculation that the Bank of Japan will announce a widening of its own stimulus programme launched in April as part of a drive to kick-start growth in the world’s number three economy.
In other currency trades, the euro bought $1.3627 and 142.42 yen against $1.3661 and 142.41 yen.
Chinese stocks sank as the interest banks charge each other to borrow cash edged higher owing to a shortage in financial markets despite a People’s Bank of China injection on Thursday night.
The bank has for two weeks refrained from adding cash to the system as it looks to avoid a build-up of bad debt but the plan has led to a repeat of a crisis in June that saw lenders struggle to raise funds to invest, in turn hammering the stock market.
On oil markets New York’s main contract, West Texas Intermediate for February delivery, was down 24 cents at $98.80 in afternoon trade while Brent North Sea crude for February eased 29 cents to $110.00.
Gold fetched $1,195.25 at 1050 GMT compared with $1,205.05 late Thursday.
In other markets:
—Singapore closed up 0.79%, or 24.25 points, at 3,094.48.
Oil rig maker Keppel Corp rose 1.12% to Sg$10.85 while Oversea-Chinese Banking Corporation edged up 1.22% to Sg$9.99.
—Mumbai rose 1.79%, or 371.10 points, to 21,079.72 points.
India’s largest private firm Reliance Industries Ltd (RIL) rose 4.58% to ₹ 893.65 after the government decided to allow it to charge higher prices for gas from April 2014. IT outsourcer Wipro Ltd rose 3.60% to ₹ 548.95.
—Jakarta ended down 0.86%, or 36.42 points, at 4,195.56.
State miner Aneka Tambang fell 8.77% to 1,040 rupiah, while Asia Pacific Fibers lost 4.71% to 81 rupiah.
—Kuala Lumpur dropped 4.93 points, or 0.27%, to 1,841.25.
Puncak Niage ended 6.3% lower at 3.13 ringgit while Bumi Armadas shed 4.2% to 3.89. Ambank gained 3.3% to 7.50 ringgit.
—Taipei ended flat, edging up 1.13 points to 8,408.53.
Chunghwa Telecom rose 0.33% to Tw$92.6 while Taiwan Semiconductor Manufacturing Co. fell 0.49% to Tw$102.0.
—Wellington slipped 0.55%, or 25.87 points, to 4,681.19.
Fletcher Building was down 1.52% at NZ$8.40, Telecom eased 1.70% to NZ$2.31 and Air New Zealand rose 0.92% to NZ$1.65.
—Manila fell 1.49%, or 87.99 points, to 5,835.13.
Bangkok lost 0.29% or 3.91 points to 1,342.72.
—Airports of Thailand dropped 3.09% to 172.50 baht, while oil company PTT added 0.34% to 291.00 baht.
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