European stocks shrug off Japan market dip
AMSTERDAM (AP) — European stocks shrugged off a slide on the Japanese stock market Monday and traded higher as a member of the European Central Bank repeated the bank's commitment to low interest rates.
German executive board member Joerg Asmussen said in a speech in Berlin that with the European economy in recession, the bank would continue to pursue easy monetary policy "as long as necessary."
In Japan, the yen strengthened and stock market fell sharply after Bank of Japan Governor Haruhiko Karoda said over the weekend interest rates could rise without causing instability as the Japanese economy strengthened.
The Nikkei 225 shed 3.2 percent to close at 14,142.65, with exporters hit hardest due to the rising yen. That's the reverse of the picture for most of this year, when yen losses helped propel the index to a 36 gain since January.
In European trading, Germany's DAX rose 0.5 percent to 8,349.43. France's CAC-40 advanced 0.7 percent to 3,983.24. Markets in Britain and the U.S. were closed for public holidays.
The yen's recent weakness has been a byproduct of the economic stimulus policies embraced this year by Prime Minister Shinzo Abe, who has embarked on an aggressive campaign to lift consumer prices and encourage borrowing and spending. As part of that effort, Japan's central bank is flooding its financial system with money, helping reduce the value of the yen.
Nissan Motor Corp. dropped 6.8 percent. Yamaha Motor Co. tumbled 7.9 percent. Sony Corp. slid 6.3 percent.
Other global markets were mixed.
Hopes for a global economic recovery were undermined last week when a survey on China's monthly manufacturing pace showed a bigger-than-expected decline. Less-than-clear indications from the U.S. Federal Reserve on whether it might scale back its aggressive bond-buying program, dubbed quantitative easing or QE, also caused investors to curb their enthusiasm.
Hong Kong's Hang Seng index reversed early losses Monday to rise 0.3 percent to 22,686.05 after pledges by China's leaders to pursue sustainable growth helped push up alternative energy stocks. China Everbright International jumped 5 percent. Anton Oilfield Services, which is pursuing shale gas development in China, surged 8.3 percent.
"We have seen a lot of funds buying into shale gas, wind power and environmental protection," said Jackson Wong, vice president at Tanrich Securities in Hong Kong. Wong also said that a recovery in mainland Chinese stocks helped the Hang Seng.
South Korea's Kospi gained 0.3 percent to 1,979.97. Benchmarks in mainland China and Taiwan rose. Australia's S&P/ASX 200 declined 0.5 percent to 4,959.90. Benchmarks in the Philippines, New Zealand and Indonesia fell.
Benchmark oil for July delivery was down 65 cents to $93.50 in electronic trading on the New York Mercantile Exchange. The contract fell 10 cents to $94.15 a barrel on the Nymex on Friday.
In currencies, the euro rose to $1.2946 from $1.2934 late Friday in New York. The dollar was at 100.86 yen, down from last week's high of more than 103 yen per dollar.
AP Business Writer Pamela Sampson contributed to this story from Bangkok