Asian shares take comfort from US data, yen rebounds

Saturday, 22 November 2014 00:00 - - {{hitsCtrl.values.hits}}

Reuters: Most Asian stock markets rose on Friday on data showing broad US economic strength, while the yen rebounded from overnight multi-year lows after a Japanese official expressed concern about the pace of its recent descent.

MSCI’s broadest index of Asia-Pacific shares outside Japan was up about 0.2%, though on track for a weekly loss of over 1%. It was underpinned by record finishes by the Dow Jones industrial average and S&P 500 after a spate of upbeat US data contrasted with signs of spreading weakness in China and Europe. Initial US weekly jobless claims fell, factory activity in the US mid-Atlantic region grew at its fastest pace in two decades and existing home sales strengthened. Japan’s Nikkei stock average bucked the regional trend, dropping 0.8% as the yen jumped after Finance Minister Taro Aso warned that its recent weakening was ‘too rapid’. Before a Japanese holiday on Monday, “investors are locking in gains in major shares,” said Masayuki Otani, chief market analyst of Securities Japan, Inc. Aso stuck to Japan’s stance of allowing the market to determine exchange rates and dismissed the need to intervene to halt the slide, but his comments sent the dollar down about 0.5% on the day against the yen to 117.63 yen. That was well below its seven-year peak of 118.98 hit on the EBS trading platform on Thursday. The euro dropped about 0.4% to 147.68 after it soared to a six-year high of 149.12 yen in the previous session. The dollar has gained more than 7% since the yen skidded in the wake of the Bank of Japan’s surprise move on 31 October to ease policy further. Its decline accelerated this week after data showed an unexpected contraction in the third quarter, putting Japan’s economy back into recession. The euro edged up about 0.1% against the greenback to $ 1.2555. On Thursday, purchasing managers’ surveys from the euro zone showed business growth was weaker than forecasters hadpredicted, adding to expectations that monetary policy will need to be eased further. Later on Friday, European Central Bank chief Mario Draghi and Bundesbank head Jens Weidmann are due to speak at the European Banking Congress in Frankfurt. In commodities markets, US crude extended gains from Thursday, adding about 0.6% to $ 76.32. The strong US economic data helped oil snap a three-day losing streak, though markets remained wary ahead of whether the Organisation of the Petroleum Exporting Countries will agree on reducing production when it meets next week. Spot gold was slightly lower on the day at $ 1,191.98 an ounce, but still on track for its third straight weekly gain.