Tokyo leads most Asia markets higher

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HONG KONG: A fall in the yen pushed Japan’s stock market higher in early trade on Tuesday, helping it lead a broad Asia-wide advance, although analysts warned worries about the world economy and earnings would temper any rally.

World markets have been unable to maintain their momentum after the bright run seen in March, with concern growing that central banks may be running out of tools to kick-start growth and inflation.

Tokyo’s Nikkei, which has been among the worst performers this year, enjoyed a rare rally Tuesday, adding 1.1 percent, thanks to a dip in the yen, which supports exporters.

The dollar rose to 108.25 yen in Japanese trade, from 107.94 yen in New York after Japan’s finance minister reiterated that officials could still intervene in forex markets to stem the unit’s steep rise.


Taro Aso said authorities were ready to take action as needed if there were extreme movements in the foreign exchange market, Bloomberg News reported. The comments follow similar announcements last week from himself and the government’s top spokesman.

However, the greenback is still down about 5 percent from the start of the month as a growing sense of worry sees traders shift into assets considered a safe bet.

Dealers are also awaiting the upcoming corporate earnings season with trepidation.

Mitsuo Shimizu, an equity strategist at Japan Asia Securities Group, told Bloomberg News: “Once we get bad earnings results it’s possible that we’ll see more disappointment.”

Wall of worry
The gains in Tokyo were followed across most of the region, with Hong Kong up 0.3 percent up and Sydney 0.9 percent higher. Seoul, Singapore and Taipei were also in positive territory.

In opening exchanges in Europe, London and Paris rose 0.1 percent while Frankfurt added 0.5 percent.

However, Shanghai ended 0.3 percent lower after Monday’s climb, which was fuelled by upbeat inflation data that raised hopes China’s struggling economy may have turned a corner.

John Stoltzfus, chief market strategist at Oppenheimer & Co. in New York, said there was little momentum to drive any meaningful rally.

“The market lacks enough conviction to move stocks in any one direction for any one amount of time long enough for investors to sink their teeth into and rack up performance,” he said.

“There is an increased amount of skepticism and concern, mostly around earnings season. It boils down to a market that has to climb a wall of worry and has to earn its gains.”

Regional energy firms edged higher after more gains in the price of oil on Monday, with expectations that a meeting of key producers on Sunday will see a deal to limit output.

Hong Kong-listed CNOOC was up 0.2 percent and PetroChina 1.6 percent higher in the afternoon while in Tokyo Inpex was up 2.2 percent and JX Holdings 1.3 percent higher. In Sydney, Rio Tinto and BHP Billiton each climbed more than 2 percent.

AFP

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