• Mon
  • Jul 14, 2014
  • Updated: 12:24am
BusinessMoneyMarkets & Investing

Asian markets rebound, weaker yen boosts Tokyo

PUBLISHED : Wednesday, 06 February, 2013, 11:32am
UPDATED : Wednesday, 06 February, 2013, 11:32am
 

Asian markets climbed on Wednesday following big losses in the previous session, with Tokyo surging as the yen tumbled after Bank of Japan governor Masaaki Shirakawa said he will step down early.

Traders also took a lead from Wall Street and Europe, where encouraging economic data offset concerns over political uncertainty in Spain and Italy.

Tokyo soared more than three per cent to a 33-month high, Sydney added 0.84 per cent, Seoul gained 0.19 per cent, Hong Kong added 0.62 per cent and Shanghai was up 0.10 per cent.

Wellington was closed for a public holiday.

Japanese foreign exchange traders welcomed Shirakawa’s announcement that he would step down on March 19, about three weeks before the end of his term.

It fuelled expectations that Prime Minister Shinzo Abe will likely fill the post with someone who shares his ideas on aggressive monetary easing that would see more yen pumped into the economy.

The Japanese currency tumbled in New York. By the end of trade Tuesday the dollar bought 93.61 yen and the euro was at 127.13 yen, compared with 92.28 yen and 124.67 yen earlier in the day in Tokyo.

In early Tokyo trade on Wednesday the dollar bought 93.55 yen and the euro fetched 127.06 yen.

The euro was also at $1.3581, compared with $1.3582 in New York and much stronger than the $1.3489 Tuesday in Tokyo.

Major Japanese exporters have been raising their earnings outlooks thanks to recent weakness in the yen, heartening investors.

“Global markets continue to normalise, allowing risk-on trading to resume,” said SMBC Nikko Securities general manager of equities Hiroichi Nishi.

“This is partially reflected in the fall of the yen,” he told Dow Jones Newswires.

Regional markets resumed their upward trend after suffering a heavy jolt on Tuesday after Spain’s Prime Minister Mariano Rajoy was forced to deny corruption claims.

A surge in the polls for the party of former Italian premier Silvio Berlusconi, who has said he would roll back recent austerity measures, spooked markets ahead of an election this month.

However, encouraging data showed US services sector activity rising and the contraction in eurozone business activity decelerating.

Wall Street rebounded after diving Tuesday as the Dow sits close to record highs. The Dow ended 0.71 per cent higher, the S&P 500 climbed 1.04 per cent and the Nasdaq rose 1.29 per cent.

In Europe markets on Tuesday recovered some of the huge losses suffered in the previous session.

Oil prices fell, with New York’s main contract, light sweet crude for delivery in March, shedding 12 cents to $96.52 a barrel and Brent North Sea crude for March delivery slipping a cent to $116.51.

Gold was at $1,672.11 at 0230 GMT compared with $1,678.01 late Tuesday.

Share

Related topics

For unlimited access to:

SCMP.com SCMP Tablet Edition SCMP Mobile Edition 10-year news archive
 
 

 

 
 
 
 
 

Login

SCMP.com Account

or