Asian shares mixed, Tokyo lifted by yen

HONG KONG, (AFP) -Asian stock markets were mixed on Thursday but Tokyo edged higher thanks to the weakening yen, while currency dealers awaited a key interest rate decision by the European Central Bank.

Amid ongoing caution over the economic impact of the March 11 Japanese earthquake-tsunami and resulting atomic crisis traders in Tokyo helped the Nikkei index up 0.07 percent, or 6.56 points, to 9,590.93.

The index eased back from earlier highs as dealers monitor progress at the Fukushima Daiichi atomic plant, which was crippled by the twin disaster and led to concerns of a nuclear catastrophe.

Hong Kong slipped 0.20 percent in the afternoon and Shanghai gained 0.25 percent.

Sydney ended 0.10 percent, or 4.8 points, lower at 4,908.1 and Seoul was 0.21 percent, or 4.57 points, off at 2,122.14.

Tokyo was given a lift by the continuing strength of the dollar and euro against the Japanese unit as the US Federal Reserve and ECB consider tightening their monetary policies.

The euro has surged recently on expectations that eurozone interest rates will be hiked later Thursday by the ECB as it battles rising inflation.

The dollar was at 85.25 yen, slightly down from 85.44 yen in New York on Wednesday, while the yen was at 121.93 to the euro from 122.45 yen.

The Japanese unit clawed back slightly on profit-taking. The euro was at $1.4300 at $1.4332.

The ECB is forecast to hike rates after its meeting Thursday for the first time since July 2008 as prices continue to rise in the region.

However, the decision will come against the backdrop of a third member state seeking a bailout after Portugal said it would need help to balance its economy. The IMF and European Union last year were called in to support Ireland and Greece.

“Markets will likely tread water ahead of the central bank decisions today but sentiment is likely to remain positive,” said Credit Agricole in a note to clients, referring to ECB and Bank of England, which is also set to decide.

Japanese investors were also keeping an eye on upcoming earnings reports, looking for pointers to the impact of last month’s disasters.

“Many companies are saying they won’t give forecasts during earnings announcements as they are still assessing (quake) damage, but the market will listen closely to any qualitative comments made on outlooks,” Yukata Miura, a senior technical analyst at Mizuho Securities, told Dow Jones Newswires.

The Bank of Japan in the afternoon warned that the economy faced “strong downward pressure” due to the quake-tsunami, and unveiled a one trillion yen ($11.7 billion) lending programme.

It left its key rate unchanged at between zero and 0.1 percent.

Shares in TEPCO, which operates the Fukushima plant, gained 0.9 percent to 340, having hit all-time closing lows this week amid concerns its faces a huge compensation bill.

The stock has lost around 84 percent of pre-earthquake March 10 closing value.

On oil markets investors locked in profits from recent gains as Libyan rebels exported the conflict-hit country’s first crude shipment from a region they control.

New York’s main contract, light sweet crude for May, eased 43 cents to $108.40 per barrel after crossing $109 for the first time in two-and-a-half years in New York.

Brent North Sea crude for May delivery dipped 45 cents to $121.85 after touching $123.37 a barrel in London.

Gold opened at $1,456.00-$1,457.00 an ounce in Hong Kong, down from Wednesday’s close of $1,456.50-$1,457.50.

The precious metal is sitting at record highs as dealers buy into it for its safe haven status amid concerns over conflict in Libya, global inflation and the Japanese crisis.

In other markets:

-- Taipei rose 0.56 percent, or 49.74 points, to 8,901.72.

Acer rose 2.89 percent to Tw$56.9 while Taiwan Semiconductor Manufacturing Co was 0.14 percent lower at Tw$72.8.

-- Manila rose 0.16 percent, or 6.91 points, to 4,219.43.

Metropolitan Bank was unchanged at 67.85 pesos, Alliance Global fell 0.9 percent to 11.20 and Leisure & Resorts World slipped 7.3 percent to 11.00.

-- Wellington closed flat, edging up 0.48 points to 3,450.36. Restaurant Brands, which runs fast food chain KFC in New Zealand, closed up 3.4 percent at NZ$2.45, while market heavyweight Fletcher Building rose 0.3 percent to NZ$9.35.