Asian shares steady, Nikkei at fresh 5-1/2 year high

SINGAPORE (Reuters): Asian shares were steady on Wednesday, with Tokyo stocks surging to a fresh 5-1/2 year high as Japanese exporters rallied on the Yen’s sharp slide. The Yen hovered near a 4-1/2 year low versus the dollar set on Tuesday, with Yen bears remaining largely in control since the Japanese currency’s slide accelerated after Bank of Japan’s 4 April launch of drastic monetary stimulus.

The Dollar eased 0.2% to 102.21 Yen, but was not far from Tuesday’s high of roughly around 102.40 Yen, the greenback’s strongest level since October 2008.

Japan’s Nikkei share average climbed above the psychologically key 15,000 threshold for the first time since January 2008, getting a boost from the weak yen, which helps Japanese exporters. “The Nikkei has gained about 1,000 points this month, so there still is caution over the fast pace of rises in a short period of time,” a senior technical analyst at Mizuho Securities in Tokyo Yutaka Miura said. “But strong overseas markets indicate that there is a high chance that the money will flow into the Japanese market,” Miura said. The Nikkei rose 2.1% to 15,068.25. MSCI’s broadest index of Asia-Pacific shares outside Japan eased 0.1% to 481.10. South Korean equities held steady, while Australian shares rose 0.3%.

Some market players expect appetite for risk to remain fairly solid given recent signs of an improving US economy. “A combination of further improvement of economic performance and low inflation in the US should keep risk appetite buoyant and support the USD on higher yields,” strategist at Credit Agricole Anthony Lam said in a note. Data this week showed US retail sales rose unexpectedly in April, underpinning the Dollar which could gain further if upcoming US economic data also points to a recovery. The US import prices fell in April due to a drop in oil costs, a positive sign for household finances that also indicated benign inflation pressures. The US stocks rallied to record highs on Tuesday, continuing an ascent driven by the Federal Reserve’s easy monetary policy, though investors’ focus has turned to when the Fed may start to rein in its bond-purchase program.