HONG KONG: Asian markets were mixed on Friday in rollercoaster trade after routs sparked in part by fears of tighter US monetary policy, with Tokyo ending higher a day
after suffering its worst drop since the March 2011 quake-tsunami disaster.
Regional markets swung wildly after falling on Thursday on indications from US Federal
Reserve Chief Ben Bernanke that the Fed could soon start scaling back massive stimulus
measures, and on weak Chinese factory data.
Tokyo, which plunged 7.3 percent in the previous session, ended up 0.89 percent, or 128.47 points at 14,612.45.
The Nikkei had bounced back more than 3 percent in the morning as investors moved to recoup losses, but plummeted by as much as 3.37 percent in the afternoon before regaining ground.
Seoul closed up 0.22 percent, or 4.26 points at 1,973.45. Sydney dropped 1.56 percent, or 78.9 points to end the day at 4,983.5.
In afternoon trade, Shanghai rose 0.45 percent while Hong Kong was down 0.10 percent.
The volatility in Asia came after US stocks ended slightly lower on Thursday, with the Dow Jones Industrial Average falling 0.08 percent, or 12.67 points to 15,294.50, with Wall Street boosted by better-than-expected US housing and jobless data.
European markets took a heavier hit, with most indices, including London, Frankfurt and Paris, dropping more than 2 percent, following the Asian lead.
Toshikazu Horiuchi, a broker with IwaiCosmo Securities in Japan, said that “extremely nervous” trading saw some investors lock in profits with others searching out bargains after Thursday’s plunge.
“Players rushed to profit-taking after monitoring a moderate gain in the morning as they wanted to secure profit ahead of the weekend,” he said.
Earlier Friday, Kenji Shiomura, strategist at Daiwa Securities, described Thursday’s drop as a temporary correction to recent advances.
“There has not been any grave event that could change corporate earnings outlooks and what happened yesterday should be a correction to the recent excessive rises,” he said.
Prime Minister Shinzo Abe’s pro-spending, pro-growth policies have weakened the yen more than 20 percent against the dollar over the past six months, helping to boost share prices nearly 60 percent.
But some analysts had warned a correction was overdue.
The “slump is not necessarily the end of the bull market in Japanese equities, but the next few months will be much harder going,” London-based Capital Economics said in a note before afternoon trading.
Analysts said that Thursday’s drop was triggered after Bernanke indicated to Congress that the US could start reducing its $85-billion-a-month bond-buying program at one of the next few meetings.
And selling pressure increased when British banking giant HSBC said that its preliminary purchasing managers’ index (PMI) for China fell to a seven-month low of 49.6 in May from 50.4 in April, putting it below the 50 mark indicating contraction.
“Weaker manufacturing PMI has dashed hopes of an economic recovery and capped upward momentum,” said Soochow Securities analyst Deng Wenyuan in China.
Japanese stocks were also tracing yen movements, with a weak yen tending to boost the market. The dollar was at 101.72 yen in Asia compared to 101.82 yen late on Thursday in New York City.
“We could be at a point of reckoning for the weak yen, which has powered the stock market’s rise to the present,” said Investrust chief executive Hiroyuki Fukunaga.
“Players have switched from buying Nikkei futures and shorting the yen to doing the opposite, with individual investors piling in, adding to the volatility,” he added.
The euro was at 131.59 yen from 131.72 yen and at $1.2936 from $1.2935.
Oil closed little changed in New York City on Thursday from sharper losses in Asia, with New York’s main contract, West Texas Intermediate light sweet crude for July edging down three cents to $94.25 a barrel, and Brent North Sea crude down 16 cents at $102.44. There was no trading in Singapore on Friday.
Markets were also closed in Bangkok and Kuala Lumpur.