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Asian markets up on China data, yen sinks further

PUBLISHED : Tuesday, 09 April, 2013, 11:44am
UPDATED : Tuesday, 09 April, 2013, 11:44am

Asian markets rose on Tuesday, boosted by positive inflation data from China, while Tokyo extended its winning streak as the yen sank to multi-year lows.

Wall Street also provided a strong lead ahead of the January-March corporate earnings season.

Tokyo was 0.51 per cent higher by the break, Hong Kong climbed 1.03 per cent, Sydney added 1.20 per cent, Shanghai was 0.95 per cent higher and Seoul was flat.

Beijing unveiled data Tuesday showing inflation came in at 2.1 per cent in March, well down from the 10-month-high 3.2 per cent seen the month before and below forecasts for 2.4 per cent.

The news soothed investor concerns that another high figure would prompt the lawmakers to tighten monetary policy further.

“Markets were overly worried when headline CPI inflation jumped to 3.2 per cent in February, so today’s reading will definitely help alleviate the inflation and monetary-tightening concerns,” Bank of America Merrill Lynch economist Lu Ting said in a note, according to Dow Jones Newswires.

Chinese shares have suffered in recent months owing to concerns about the world’s number two economy, while the recent spike in inflation fuelled expectations the government would tighten monetary policy to prevent runaway prices.

Inflation is a key issue for the ruling Communist Party as it brings with it the risk of popular discontent and the threat of social unrest.

Japanese shares enjoyed another rally on the back of the tumbling yen -- with the Nikkei sitting at highs not seen since August 2008.

Tokyo investors have gone on a buying spree since the Bank of Japan last week unveiled a huge stimulus package aimed at beating decades of deflation.

The yen has lost almost eight per cent since the bank announced its shift in monetary policy that will see a flood of cash hit financial markets.

In early trade the dollar bought 99.40 yen -- levels not seen since May 2009 -- from 99.36 yen in New York late Monday.

The euro also jumped to a more than three-year high of 129.80 yen, from 129.23 yen in US trade.

The European unit was also at $1.3053 compared with $1.3005.

New York trading ended on a positive note, providing more lift to Asia in anticipation of positive earnings reports.

The Dow rose 0.33 per cent and the S&P 500 put on 0.63 per cent, while the Nasdaq added 0.57 per cent.

Oil prices rose, with New York’s main contract, light sweet crude for delivery in May adding 29 cents to US$93.65 a barrel and Brent North Sea crude for May up 51 cents to US$105.17.

Gold was at US$1,575.02 an ounce at 0305 GMT compared with US$1,577.10 late on Monday.

Agence France-Presse

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