Tokyo stocks lead Asia down as yen strengthens

0

HONG KONG: Tokyo stocks led most Asian stock markets lower on Wednesday in lackluster trading as the dollar weakened against the yen after US government figures showed a decline in productivity.

Advertisements

Traders were cautious, with markets flitting in and out of positive territory despite a positive lead from Europe and in the US, where the technology-rich Nasdaq ended at a new record on Tuesday.

The dollar dropped to 101.50 yen from 101.88 yen in New York and was sharply down from 102.44 yen in Tokyo Tuesday, after the US Labor Department reported second-quarter productivity had fallen 0.5 percent.

The Japanese unit is seen as a safe haven in times of uncertainty, but a stronger yen is negative for Japanese shares because it dampens the overseas profitability of exporters.

Oil prices also extended losses in Asian trade after industry data showed a rise in US crude stockpiles, supporting oversupply concerns.

Investors meanwhile continued to digest news of an unscheduled OPEC meeting next month – an announcement that has fuelled speculation of possible action to stabilize the market.

Tokyo closed down 0.2 percent, with Toyota, factory robot maker Fanuc and cosmetics maker Shiseido among those seeing declines.

Shares in the make-up giant plummeted 7.5 percent after it cut its full-year profit forecast the previous day, blaming the yen’s rise.

Shanghai also eased to close 0.2 percent lower after Tuesday’s rally sparked by encouraging producer price data for July.

Hong Kong shed earlier gains and was also down 0.2 percent in late afternoon trade.

Sydney ended 0.2 percent lower even as Australia’s Commonwealth Bank posted a record Aus$9.23 billion (US$7.08 billion) in annual profit.

Australia’s biggest bank sounded a cautious note about the country’s economic outlook however, with chief executive Ian Narev warning that the nation’s nominal growth, which is not adjusted for inflation, needed to strengthen.
Seoul finished flat while Jakarta was lower.

The US productivity figure marks a decline for the third consecutive quarter, dampening expectations for a US interest rate rise this year.

Surprisingly robust US jobs data published last Friday had helped keep the dollar strong in recent days.

Japanese markets are also preparing to close on Thursday for a public holiday, which analysts said had an impact on the market.

“Investors won’t be inclined to take on big risks,” Chihiro Ohta, a senior strategist in Tokyo with SMBC Nikko Securities, told Bloomberg.

In early European trade, London and Frankfurt fell 0.2 percent while Paris dropped 0.4 percent.

AFP

Share.
loading...
Loading...

Please follow our commenting guidelines.

Comments are closed.