Asia stocks down after rally, Tokyo up on yen move

Asia stocks down after rally, Tokyo up on yen move

Hong Kong: Asian shares mostly fell on Monday following last week’s Europe-inspired rally, but Tokyo was up thanks to another government forex intervention after the yen hit a new record versus the dollar.

Hong Kong fell 1.03%, Sydney was 0.60% off, Seoul dipped 0.49% and Shanghai edged 0.10% lower.

Tokyo was 0.51% higher by the break.

The Japanese Nikkei reversed earlier losses after the government stepped into the currency markets again to sell the yen which hit another record high against the dollar.

The dollar rose above ¥79 in midday trade after sinking to a post-war low of ¥75.32 in the morning.

It was the first intervention since August as the government tries to protect the country’s exporters, who are hurt by the strong currency which makes their goods expensive overseas.

Finance minister Jun Azumi on Thursday threatened government intervention in financial markets, complaining that speculators were using Europe’s debt crisis as an excuse to push the safe haven yen higher.

However, Norihiro Fujito, a senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities, said: “The question, as in the past, is sustainability."

“Previous interventions have had an impact for two or three days, but it has not led to a trend shift," he told Dow Jones Newswires.

The euro was at $1.4152, from $1.4147 late Friday in New York, and at ¥107.26, from ¥107.29.

Global markets have been on a high since Thursday’s eurozone deal, which will see Greece’s bondholders take a 50% cut on their assets, a boost the European Financial Stability Facility (EFSF) bailout fund, a recapitalization of the region’s banks.

However, markets now want to know how the deal will work.

“With more questions than answers markets will be hungry for further details over coming weeks and until then it is difficult to see risk appetite stretching too far," Mitul Kotecha, strategist at Credit Agricole, said in a note.

In Sydney shares in Qantas were up 4.2% after an industrial tribunal ordered an end to a bitter labour row that led to the grounding of the Australian airline’s entire fleet.

The carrier’s chief executive Alan Joyce on Saturday grounded its entire fleet around the world and ordered an unpaid lock-out of union staff after months of industrial action that has battered its share price.

But dealers welcomed a decision by industrial regulator Fair Work Australia to order the termination of the action by both sides, allowing them 21 days to hammer out their differences or face a compulsory arbitration decision.

The first Qantas plane to take off since the grounding left from Sydney Monday afternoon.

Eyes will this week be on central bank policy meetings in the United States, Europe and Australia this week, while US jobs data Friday will provide an indication as to the state of the world’s number one economy.

On oil markets New York’s main contract, light sweet crude for delivery in December, gained 14 cents to $93.46 per barrel.

Brent North Sea crude for December delivery rose 21 cents to $110.12.

In morning trade gold was up at $1,724.50 an ounce against $1,739.90 late Friday.