Asian stocks drift higher, exporters underpin Japan’s Nikkei

Asian stocks drift higher, exporters underpin Japan’s Nikkei
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First Published: Tue, Sep 15 2009. 03 53 PM IST
Updated: Tue, Sep 15 2009. 03 53 PM IST
Hong Kong: Asian stocks edged up on Tuesday, with markets in South Korea and Taiwan closing at 14-month highs, as investors put their faith in the global economic recovery and looked past a trade spat between the United States and China.
The technology and exporter sectors were the biggest gainers on a day without a major theme driving the markets in Asia. LG Electronics, the world’s No. 3 handset maker, jumped more than 3% in Seoul to snap a weeklong slide.
“Investors want to know if the US economy is ready for a turnaround without government help and how consumers are faring,” said Kim Young-june, a market analyst at SK Securities in Seoul, before US retail sales data is released later.
The Nikkei average rose 0.2% as companies such as Canon Inc bounced back from a slide sparked by the yen’s jump to a seven-month high against the dollar, which took the Japanese currency into territory seen as damaging to exporter earnings.
The yen slipped beyond ¥91 per dollar, providing some relief to investors worried that sustained gains would prove a serious obstacle to Japan Inc’s gradual recovery this year.
While officials in the outgoing Japanese government voiced concern about the yen’s rise, the former finance minister tipped to again take the helm of the ministry -- Hirohisa Fujii -- has said Japan should not intervene in markets.
“Market participants speculate Fujii may be more tolerant of a stronger yen and reluctant about intervening in the forex market,” said Makoto Yamashita, chief Japan interest rate strategist at Deutsche Securities in Tokyo.
Japan has racked up foreign reserves totalling more than $1 trillion, second only to China’s, from its previous bouts of yen-selling intervention.
But Japan has stayed out of the market since 2004, even during last year’s violent yen surge as leveraged carry trades were unwound. The lack of action has stirred questions about whether Tokyo has already adopted a more hands-off currency policy.
Trading activity was limited because Hong Kong’s financial markets were closed for the morning as Typhoon Koppu swept through the city.
The Hang Seng index closed 0.3% lower in shortened trade, with Alibaba.com, the most heavily traded stock, losing more than a tenth of its value after Yahoo sold its 1% direct holding in China’s top e-commerce company.
Taiwan’s TAIEX climbed 1.2% to a 14-month high on hopes that the launch of Microsoft’s Windows 7 will boost demand for PC makers such as Asustek.
The Shanghai Composite Index edged a quarter of a percent higher to a new one-month closing high.
Seoul’s Kospi rose 1.1%, with financial shares such as Shinhan Financial Group leading gains.
Indian shares climbed 1.5% while Australia rose a shade and Singapore closed a tad lower.
The MSCI index of Asia-Pacific shares rose about half a percent, recouping some of the previous day’s losses and hovering just below a one-year peak struck last week. For the year, the MSCI benchmark for Asia is still up about 53 percent.
On Monday, the US S&P 500 edged up 0.6% and reached its highest level of 2009 after a slew of merger activity suggested big investors still see value in the market following this year’s rebound.
Optimism about potential deals overshadowed concerns about trade friction between the United States and China after Washington imposed special duties on Chinese tyre imports.
China unveiled data on Tuesday showing that tyre exports fell in the first half of a year to rebut Washington’s accusation it was flooding the US market, even as both countries moved to allay concerns about a trade war.
MIXED CURRENCIES
The dollar rose against the yen to hover above seven-month lows on short-covering but underlying sentiment remained fragile ahead of data this week.
The dollar’s direction was mixed as it fell against a broadly firmer sterling after British house prices rose for the first time in more than two years, giving a boost to the pound.
The euro hit a session low against the dollar after a survey showed German analyst and investor sentiment improved by less than expected in September.
The dollar index, which measures the dollar’s value against a basket of currencies, rose about 0.3% to 76.800, staying above a one-year low of 76.457 hit last week.
The Australian dollar erased earlier losses made after minutes of the Reserve Bank of Australia’s last policy meeting gave little guidance to markets on when the cash rate would be raised from its record low of 3%.
Safe-haven government bonds lost ground as stock markets stabilised. The benchmark 10-year Japanese government bond yield edged up 2 basis points to 1.310%, holding in a range between 1.285% and 1.355% over the past few weeks.
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First Published: Tue, Sep 15 2009. 03 53 PM IST
More Topics: Markets | Japan | Stocks | Asian markets | Nikkei |