BackAsia stocks gain, led by Japan as dollar near 120 yen; oil rises
Global bond yields holding near historic lows before ECB decision amid speculation policy makers are moving closer to buying govt debt to combat deflation
Premium
Hong Kong: Asian stocks rose, as Japanese shares extended gains with the dollar near its strongest level since 2007 versus the yen. South Korea’s won slipped while oil climbed in New York and London.
The MSCI Asia Pacific Index added 0.4% by 12:01 pm in Tokyo, as Japan’s Topix index rose 0.8% toward the highest level since December 2007. The Shanghai Composite Index climbed 0.9%. Standard & Poor’s 500 Index futures fluctuated with the greenback at 119.91 yen, and near a two-year high against the euro before the European Central Bank (ECB) decides policy. The won lost 0.2%. Australian bonds rallied, while oil in New York rose 0.5%.
Global bond yields are holding near historic lows before the ECB decision on Thursday amid speculation policy makers are moving closer to buying government debt to combat deflation. Investors are waiting US employment reports on Friday after private data on Wednesday showed steady hiring and a faster-than-estimated expansion of services industries. US oil supplies unexpectedly dropped last week, tempering concern that a global glut will worsen after OPEC maintained output.
“We have the back-to-the-future theme" in markets now, said Sean Darby, chief global equity strategiest at Jefferies Hong Kong Ltd. “We have the sort of environment we had in the late 1990s, which tends to point us to a pretty good period in equities. Low bond yields, no inflation, commodity prices well behaved, and equities did quite well during that period."
Japanese shares
Japan’s Nikkei 225 Stock Average added 0.6%, headed for its highest close since July 2007. Japanese equities have been climbing amid a retreat in the yen after Prime Minister Shinzo Abe put off a second increase to the nation’s sales tax and called a snap election. The Bank of Japan also unexpectedly bolstered stimulus 31 October.
Hong Kong’s Hang Seng Index increased 0.5% and a gauge of Chinese companies listed in the city added 0.9%. Hong Kong’s benchmark stock gauge fell 2.3% this week through yesterday, when the measure dropped 1% as short- selling turnover on the city’s bourse surged to HK$20.1 billion ($2.6 billion), the most on record.
The Shanghai Composite Index, which closed at the highest level since July 2011 yesterday, added 0.8% on Thursday. The volume of transactions was 12% above the 10-day average for the time of day today after turnover on the exchange jumped to an all-time high on Wednesday.
WTI oil rose for the third time in eight days, climbing to $67.67 a barrel in New York. Data from the US Energy Information Administration showed the nation’s oil inventories dropped by 3.69 million barrels last week, after analysts forecast an increase of 1.75 million.
Yen, Euro
Brent oil climbed 0.5% after falling 0.9% last session to a more-than-four-year low of $69.92 a barrel as investors continued to digest as decision last week by the Organization of Petroleum Exporting Countries (OPEC) not to cut production.
The yen slid as much as 0.1% to 119.90 per dollar on Thursday, the weakest level since 2007. The currency hasn’t breached 120 since July of that year. The won dropped to 1,114.43 per dollar as the weaker yen stoked concern Japanese exporters will gain a competitive advantage.
The euro was steady at $1.2315 on Thursday after touching the lowest level since August 2012 last session. The ECB will leave its main rates unchanged today, according to economists surveyed by Bloomberg. The Bloomberg Dollar Spot Index, which tracks the greenback against 10 major peers, was little changed after gaining 0.3% on Wednesday to its highest close since March 2009.
“Tonight’s ECB meeting is likely to be the only game in town," Mark Smith, a senior economist in Auckland at ANZ Bank New Zealand Ltd., wrote in a client note. “While QE at this juncture is probably a step too far, it would be a bolt out of the blue should it occur. Rate hikes look to be a forgone conclusion if the US economy remains strong."
US data
The S&P 500 rose 0.4% last session to an all-time high of 2,074.33, while the Dow Jones Industrial Average added 0.2% to a record 17,912.62.
Data yesterday showed service providers from US retailers to builders expanded in November at the second-fastest pace in more than nine years. US companies added 208,000 workers in November, figures from ADP Research Institute indicated, below the 222,000 increase projected in a Bloomberg survey and down from a revised 233,000 in October. Economists forecast nonfarm payrolls rose by 230,000 employees in November, up from 214,000 in the previous month.
The Federal Reserve’s Beige Book was also released on Wednesday, and indicated there was “widespread" hiring across districts as the US economy continued to expand. Bloomberg
Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!
