Tokyo gains, but other Asian markets retreat

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TOKYO: Tokyo stocks rose sharply on Tuesday, fuelled by weakness in the yen, but broader Asian markets were subdued as last week’s rally waned.

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A sense of stability has returned to global markets following the Federal Reserve’s decision last week to scale back its forecasts on hiking borrowing costs, after a tumultuous first two months of the year.

On Tuesday, however, most regional markets retreated in thin trading, with no clear driver ahead of the long Easter break, which starts Friday.

“We’re at a key junction where we need to see fresh news to push the market higher,” Chris Weston, Melbourne-based chief market strategist at IG, told Bloomberg News.

“Central banks have put in place measures that helped subdue market volatility,” he added.

“However, the market is at risk of going into some sort of consolidation given the extremely low volatility.”

The dollar fell to 111.65 yen in the aftermath of explosions at Brussels airport from 112.10 yen earlier on Tuesday in Tokyo and 111.94 yen Monday in New York.

In Tokyo, automakers were among the biggest gainers, as the weaker yen increases the value of their profits being repatriated in March ahead of the April start of the financial year.

Toyota surged more than three percent, Nissan tacked on nearly two percent, and Honda finished up more than one percent.

Nintendo skyrocketed more than eight percent after it attracted more than one million users to its first smartphone game app Miitomo less than a week after its release.

Tokyo’s benchmark Nikkei 225 index closed 1.94 percent higher as trading resumed after a long weekend, and Seoul was up 0.35 percent, while Singapore and Wellington were also higher.

However, China’s key Shanghai Composite Index ended down 0.64 percent, Hong Kong slipped 0.08 percent and Sydney and Taipei were in the red as well.

Chinese shares surged on Monday after authorities relaxed rules on margin trading for the first time since last summer’s collapse in mainland markets.

Margin trading, whereby investors only need to deposit a small proportion of the value of their trades, was behind a boom that sent the Shanghai bourse up 150 percent in 12 months, before it plummeted from last June after regulators moved to tighten rules on the practice.

The dollar held firm against the euro on Tuesday, after two Fed officials suggested the US central bank may raise key interest rates at its next meeting in April.

San Francisco Fed president John Williams and Atlanta Fed president Dennis Lockhart said Monday that recent economic data may justify additional policy tightening after the central bank raised rates in December — its first hike in almost a decade.

“There is sufficient momentum evidenced by the economic data to justify a further step at one of the coming meetings, possibly as early as the meeting scheduled for end of April,” said Lockhart.

On oil markets the main US benchmark West Texas Intermediate held on to gains above $41.

At about 6 a.m. local time, US benchmark West Texas Intermediate for delivery in May, a new contract, rose 20 cents to $41.72. Brent for May was 17 cents higher at $41.71. AFP

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