Tokyo, Japan (BBN)-Asia markets were mixed on Tuesday, with a weaker yen buoying Japanese stocks while Chinese stocks slipped after rising on Monday.
Japan’s Nikkei 225, which reopened after a public holiday Monday, was up 1.17 per cent, despite having come under pressure in recent weeks due to the yen’s strength against the dollar, reports the CNBC.
Across the Korean Strait, the Kospi was flat.
Hong Kong’s Hang Seng index was up 0.42 per cent.
Chinese markets, which were up Monday after authorities signaled the loosening of controls over margin lending, retreated slightly, with the Shanghai composite down 0.78 per cent and the Shenzhen composite lower at 0.41 per cent.
Down Under, the ASX 200 index gave up early gains to trade flat, with the financials and materials sub-indexes both falling, down 0.36 and 0.38 per cent, respectively.
Mark Matthews, head of research for Asia at Bank Julius Baer, wrote in a morning note that ahead of the Good Friday holiday, markets were very quiet but stable.
“There is no real reason for them to sell off, apart from their being high,” said Matthews.
But economists at Deutsche Bank said in their Asia Economics Monthly note that despite the recovery in global risk sentiment, accompanied by stability in the currency market and a rally in asset prices, Asia’s economic outlook remained a cause for concern.
“Asia’s underlying economic data have worsened progressively. Exports, which declined across the board in the region last year, have started 2016 even weaker, both in value and volume terms,” the economists said, adding “industrial production data and PMI survey readings have also been poor. Weak demand from China is a key contributor to this phenomenon, but another important element is chronic weakness in demand from EU.”
On the currency front, the Japanese yen retreated to the 112 handle against the dollar, with the dollar/yen pair trading up 0.16 per cent at 112.11 as of 10:00am HK/SIN time.
Major Japanese exporters received a boost Tuesday morning, with Toyota adding 3.33 per cent, Nissan up 2.64 per cent and Honda adding 1.86 per cent.
A weaker yen is usually a positive for exporters as it improves their overseas profit numbers when converted to local currency.
“Japanese stocks get caught up with the rest of the world with this pretty strong risk-on rally … as easy monetary policy globally drives stocks up everywhere,” David Sokulsky, executive director and head of investment strategy at UBS Wealth Management Australia, said in a “Squawk Box” interview.
The Australian dollar remained near the $0.75 level against the greenback, with the pair trading near flat at 0.7576.
In corporate news, Japan’s Jiji News reported Monday that Taiwanese manufacturer Foxconn would likely reduce its capital injection into troubled electronics maker Sharp by around 100 billion yen ($898 million), compared to its initial plan of injecting 489 billion yen, according to Reuters. Shares of Sharp were down 3.62 per cent.
Elsewhere, the Nikkei reported that airbag manufacturer Takata planned to sell Irvin Automotive Products, an American company that produces automotive interior materials, for tens of billions of yen to fund the recall of its defective air bags.
Takata shares were up 1.14 per cent.
Mining stocks were mixed, with major miners in Australia, Rio Tinto and BHP Billiton down 0.42 and 1.29 per cent respectively.
But iron ore producer Fortescue was up 0.73 per cent, following an overnight uptick in iron ore prices to $58 a tonne, from $56.30 on Friday.
Chinese metal plays were mostly lower, with shares of Baoshan Steel down 2.57 per cent, Shandong Jinling Mining down 4.34 per cent and Yunnan Copper lower by 2.97 percent.
Metal prices on the London Metal Exchange (LME) were mixed, with three-month copper trading flat while three-month aluminum was up 0.17 per cent.
Oil prices advanced overnight, with Reuters reporting that data showed crude inventories at the Cushing, Oklahoma, delivery hub for US futures fell for the first time since January.
US crude futures for April delivery added 1.2 per cent to $39.91 a barrel, before expiring as the front-month contract.
During Asian hours, US crude futures for May delivery, which becomes the front-month contract, retreated 0.34 per cent to $41.38 a barrel.
Global benchmark Brent futures were lower by 0.55 per cent at $41.31, after settling up 0.8 per cent.
Energy plays were mixed as of 10:00am HK/SIN time, with Santos lower by 0.63 per cent, Woodside Petroleum up 1.14 percent, Japan’s Inpex was down 1.18 per cent and South Korea’s S-Oil fell 0.33 per cent.
Mainland Chinese energy plays were mostly lower, except for Sinopec which climbed up 2.53 per cent.
Major US indexes advanced overnight, with the Dow Jones industrial average adding 0.12 per cent, S&P 500 higher by 0.1 per cent and Nasdaq composite gaining 0.28 per cent.