Tokyo: Asian shares rose on Wednesday, helped by gains on Wall Street, but Japan lagged as exporters such as Honda Motor Co lost ground on news that US consumer confidence has slumped to record lows.
The dollar edged up 0.1% to ¥89.09 as gains in stock markets prompted investors to dump the safe-haven Japanese currency, while the dollar dipped versus the euro as players awaited outcome of a Federal Reserve meeting.
The US central bank has already cut interest rates to nearly zero and is searching for other tools to pull the world’s largest economy out of a deepening year-long recession.
The Fed could unveil fresh steps to ease the global credit crunch when it concludes a two-day policy meeting later today and traders will be scouring its statement for any clues on whether it will buy US government bonds, which could help check longer term borrowing rates.
On Tuesday, the Fed took a step toward easing mortgage foreclosures threatening millions of Americans, announcing that it would write down troubled mortgages to keep people in their homes.
Until the US housing market stabilises, economists see little hope that the economy can pull out of its downward spiral. The MSCI index of Asia-Pacific stocks outside Japan rose 1.2%, buoyed by gains on Wall Street, which rallied for the third day in a row on Tuesday on hopes that government efforts to stabilize the US economy will take hold.
The Dow Jones industrial average rose 0.72% while the Standard & Poor’s 500 Index gained 1.09% and the Nasdaq Composite Index rose 1.04%, shrugging off a Conference Board report that its index of consumer confidence fell to a record low on January.
But many investors remain wary of commiting their cash after heavy losses last year and a flurry of bleak economic news and profit warnings from companies around the world.
In Tokyo, the benchmark Nikkei average fell 0.7% with shares in Nomura Holdings Inc, Japan’s largest brokerage, sliding about 3% after it reported a record $3.8 billion quarterly loss on Tuesday.
The loss, reported after market hours, was larger than forecast, and stemmed from the cost of integrating Lehman Brothers’ operations, soured trades and exposure to Iceland and Bernard Madoff.
Canon Inc fell after a newspaper reported the electronics maker’s operating profit will likely drop about 60% this year primarily due to the strong yen. Canon announces its results later on Wednesday.
In Seoul, shares rose after Lunar New Year holidays, led by chip makers after German rival Qimonda filed for insolvency.
Australian shares gained 0.8% shored up by the banks, while top property stock Westfield Group and building materials group Boral Ltd slid on profit warnings.
The euro also climbed against the yen while sterling, which hit a record low versus the Japanese currency last week, gained 0.4% to ¥126.18.
The euro was up 0.4% at $1.3211
Gold held near its highest in more than three months hit this week, as troubles in the financial sector continued to spur investors to look for havens from market turmoil.