HONG KONG: Asia’s markets fell on Monday in the first full day of trade in the new year, with Tokyo tumbling as the dollar and euro retreated from five-year highs against the yen.
Investors were given a mixed lead from Wall Street after Federal Reserve chief Ben Bernanke called for continued efforts to reinforce the recovery in the US economy.
Tokyo fell 2.35 percent, or 382.43 points to 15,908.88, Sydney lost 0.47 percent, or 25.2 points to 5,324.9, Shanghai gave up 1.80 percent, or 37.43 points to finish at 2,045.71, while Hong Kong lost 0.58 percent, or 133.13 points to close at 22,684.15.
However, Seoul rose 0.37 percent, or 7.14 points to close at 1,953.28.
Japan’s Nikkei started the year with heavy losses after surging 57 percent in 2013, with profit-taking adding to downward pressure, while the yen rebounded from recent lows.
The dollar and euro early last week hit highs against the yen not seen since October 2008, but they fell back on Friday in thin trade as many dealers stayed away after the holiday season.
“Tokyo stocks are overbought, and a break in the yen’s fall, plus weaker futures are sure to result in some long-needed profit-taking after the December runup,” said Hiroichi Nishi, general manager of equities at SMBC Nikko Securities.
“Hopes for a continued US economic recovery and longer-term dollar appreciation should keep sharp sell offs well contained, however,” he added.
The US currency stood at 104.43 yen Monday in Tokyo against 104.85 yen in New York City on Friday, and well off the mid-105 yen mark seen at the start of last week.
The euro bought 141.85 yen compared with 142.44 yen, well down from the 145.69 reached last Monday. The single currency was also at $1.3582, from $1.3586.
Bernanke on economy
In the United States, Bernanke, in a speech to economists on Friday as he prepares to leave office, called for continued efforts to make sure the world’s number one economy keeps growing and the unemployment rate decreases.
Highlighting that the US jobless rate fell from 10 percent in 2009 to 7 percent recently, Bernanke nevertheless insisted: “Much progress has been made, but more remains to be done.” He added that the Fed’s decision last month to cut its monthly bond-buying by $10 billion to $75 billion did not indicate any lesser commitment to maintain an easy-money policy “for as long as needed.”
The Dow Friday added 0.17 percent, the S&P 500 dipped 0.03 percent, and the Nasdaq fell 0.27 percent. Chinese shares extended their losses from last week on fears that the restart of initial public offerings (IPOs) after a year-long hiatus will cause a glut at a time with there is already concern about liquidity.
But Capital Securities analyst Amy Lin told Dow Jones Newswires that they thought it was a “short-term reaction to the restart of the IPOs, given the number of the IPOs does come in higher and faster than many had expected.”
She added that, “In the medium-term the market should rebound because IPOs are what investors want for the market [to stay active and viable].”