Beijing, China (BBN) – Asian equities were mostly lower in Monday trade, with the dollar sinking against the yen, following tensions in the Korean Peninsula and better than expected Chinese economic data, reports CNBC.
North Korea tested a missile which “blew up” soon after launch, following a military parade to commemorate the birthday of Kim Il-Sung over the weekend, Reuters said.
The test came before US Vice President Mike Pence arrived in Seoul for a trip that aims to reassure American allies in Asia.
The dollar/yen traded at 108.32, earlier plunging to its lowest levels since 15 November last year.
Likewise, the yen was stronger compared to the euro, with the euro/yen weakening to a 5-month low of 114.82 yen earlier in the session.
The euro/yen traded at 115.04 yen at 9:00am HK/SIN.
Demand for other safe-haven assets strengthened, with spot gold trading at $1,294.34 an ounce at 8:55am HK/SIN, hitting a five-month high of $1,295.50 earlier in the session.
“Gold has surged (classic geopolitical risk reflex) along with the slump in US Treasury yields (another haven trade) while equities are softer … Nonetheless, emerging markets and higher yielding currencies have not sold off in alarm either, with most emerging market Asia currencies still fairly buoyant,” Mizuho economist Vishnu Varathan said in a Monday morning note.
Japan’s Nikkei 225 was lower by 0.31 per cent but the Kospi climbed 0.37 per cent.
Hong Kong, Australia and New Zealand markets are closed for Easter Monday.
In China, Q1 GDP rose 6.9 percent on year, better than the 6.8 per cent expected.
First quarter GDP rose 1.3 per cent quarter-on-quarter. Other Chinese data was similarly upbeat, with March industrial output accelerating 7.6 per cent on year, the fastest pace of growth since December 2014 according to Reuters.
Chinese markets were mostly lower following the data release. The Shanghai Composite declined by 0.72 per cent while the Shenzhen Composite fell 0.845 per cent.
On the energy front, Brent crude was lower by 0.41 per cent to trade at $55.66 per barrel and US crude fell by the same amount to trade at $52.96.
Oil prices had hit a one-month high last Wednesday following news that OPEC could extend output cuts beyond June.
In other currency news, the greenback traded weaker against a basket of rivals at 100.39, significantly lower compared to the 101 handle seen last week.
The Aussie strengthened to trade at $0.7587, its highest level since the beginning of April.
“What we see right now is the starting point for the dollar into 2017 was just very, very rich in terms of valuation. And as we see more disappointment from let’s say Trump’s policy and as the world outside the US looks better, I think we’re still going to see that continuation of dollar weakness,” UBS head of Commodities and FX Dominic Schnider told CNBC.
“It’s not going to be a weak currency but the dollar continues to slide on a trade-weighted basis.”
Over in Singapore, March non-oil domestic exports (NODX) beat expectations and surged 16.5 per cent on year, driven by a 20.5 per cent year-on-year rise in non-electronic NODX.
“Singapore’s recent export data in early 2017 has been strong, helped by the upturn in global electronics output and the impact of higher world oil prices on refined petroleum export values,” IHS Markit Chief Economist Rajiv Biswas noted.
Stateside, US equities were lower across the board before the Good Friday holiday, with the Dow Jones industrial average, S&P 500 and Nasdaq all down by more than 0.5 per cent.