Asia markets mixed, with Japan stocks falling as dollar weakens
Summary
Chinese mainland markets traded mixed, with the Shanghai composite nearly flat, while the Shenzhen composite added 0.30 percent. In Hong Kong, the Hang Seng index was down 0.1 percent.
Asian markets traded mixed Monday, with Japan shares taking a tumble, as a disappointing May jobs report in the US on Friday weakened the dollar and bolstered regional currencies, including the yen.
The Nikkei 225 shed 1.24 percent, retracing early losses of as much as 1.81 percent. In Australia, the ASX 200 was up 0.53 percent, led by a 3.49 percent advance in the materials sub-index.
Major Australian miners rose sharply, with shares of Rio Tinto up 3.4 percent, Fortescue advancing 5.03 percent and BHP Billiton higher by 3.99 percent.
Chinese mainland markets traded mixed, with the Shanghai composite nearly flat, while the Shenzhen composite added 0.30 percent. In Hong Kong, the Hang Seng index was down 0.1 percent.
The Korean stock market is closed for memorial day.
US nonfarms payrolls showed the country created 38,000 jobs in May, falling well below the 162,000 expected, and casting doubt on hopes for a strengthening economic recovery and a possible Federal Reserve rate hike in the coming months.
“The disastrous US nonfarm payrolls release on Friday has killed off any chance of a June rate hike by the Fed,” Angus Nicholson, a market analyst at spreadbettor IG, said.
The disappointing jobs report saw the dollar decline Friday against most major currencies. The dollar index, which measures the greenback against a basket of currencies, traded at 94.119 as of 8:05 a.m. HK/SIN on Monday, compared with levels around 95.600 before the data.
The Japanese yen was stronger against the dollar, with the currency pair trading at 106.79, compared with levels ranging from around 108-111 last week, before the release of the US jobs numbers.
On Wednesday Japan’s Prime Minister Shinzo Abe announced a delay in the country’s planned sales tax hike and detailed a new stimulus package to revive the Japanese economy. That move also had spurred the yen higher.
The Australian dollar climbed on Friday, from levels around USD 0.72 to USD 0.73; on Monday morning, the pair traded at USD 0.7338.
On Tuesday, data showed Australia’s first quarter gross domestic product grew 1.1 percent in the three months to March. Experts suggested the Reserve Bank of Australia (RBA) would likely leave monetary policy unchanged at its next meeting. In its May meeting, the RBA lowered the cash rate by 25 basis points to a record low 1.75 percent.
“However, the minutes from the last RBA meeting indicated that the decision was a close one, so the tone of the RBA statement could be slightly less dovish,” said Kathy Lien, managing director of foreign exchange strategy at BK Asset Management, in a Friday note.
In company news, Noble shares tumbled 13.46 percent, extending Friday’s more than 13 percent drop after the commodities trader said on Friday it was raising USD 500 million in a fully underwritten rights issue and that its chairman, Richard Elman, will step down within 12 months,
On Monday, Singapore’s OCBC Investment Research said it was ceasing coverage of the stock. In a note, analysts said, “As the company will continue to prune and restructure its business to improve its liquidity profile, we believe it may take a while for the dust to settle, and until then, we may have limited clarity.”
Stateside, major indexes closed lower Friday, with the Dow Jones industrial average down 0.18 percent, the S&P 500 lower by 0.29 percent and the Nasdaq composite off by 0.58 percent.
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