Asian markets lifted by Merkel comments

HONG KONG - Asian markets were mostly higher and the euro enjoyed strong support Friday as spirits were lifted by comments from German Chancellor Angela Merkel reasserting her desire to save the eurozone.

Tokyo's Nikkei index added to the previous day's healthy gains, advancing 0.63 percent by the break as the yen eased further against the dollar with dealers growing confident enough to move out of the safe haven Japanese unit.

Hong Kong added 0.59 percent, Sydney climbed 0.63 percent, and Shanghai was up 0.21 percent, while Seoul eased 0.67 percent.

Merkel, who as head of Europe's biggest economy is key to the success of any plan to save the euro, said Thursday she backed European Central Bank chief Mario Draghi's commitment to do whatever was needed to support the currency.

On a visit to Canada she said: "What he said is something that we repeated time and again," since the Greece crisis began more than two years ago, "that we feel committed to do everything we can in order to maintain the common currency".

She said the ECB was "completely in line with what we've said all along" and its decision to set conditions on bond-buying was "a positive development for the euro-area".

The comments were seen by traders as a sign she could be warming to the idea of the ECB buying up bonds of troubled sovereign states such as Spain and Italy, which have seen their borrowing costs soar to danger levels recently.

Global markets have been enjoying gains over the past few weeks on expectations the bank will restart the bond-buying programme.

The euro was given a strong lift in New York on Merkel's remarks and it held up in Asia.

The single currency bought $1.2350 and 98.04 yen in early Asian trade, compared with $1.2358 and 98.06 yen in New York and well up from the $1.2270 and 97.15 yen it fetched in Asia Thursday.

The yen was also lower against the dollar, with the upbeat outlook providing support to riskier assets, while expectations of another round of Federal Reserve pump priming are also easing.

The dollar fetched 79.37 yen in early Asian trade, from 79.33 yen in New York late Thursday.

The greenback was helped by US data on new jobless claims and housing construction, which provided more evidence that the world's biggest economy is growing steadily, albeit slowly.

Weekly numbers for new unemployment insurance claims, an indicator of the pace of layoffs, came in as expected and in the same range as the past four months, while July data on new housing construction, although slightly down from June, showed an industry steadily picking up pace.

On Wall Street the Dow rose 0.65 percent, the S&P 500 added 0.71 percent and the Nasdaq climbed 1.04 percent.

But Facebook shares plunged 6.3 percent to a new low of $19.87 as the lockup period for sales by pre-IPO investors ended. The company's share price has almost halved since its May 18 initial share offering at $38.

New York's main oil contract, West Texas Intermediate light sweet crude for delivery in September, was down 22 cents to $95.38 a barrel in Asian trade Friday and Brent North Sea crude for October delivery sank 66 cents to $114.61.

Euro falls below 95 yen for first time in over a decade

TOKYO: The euro hit fresh lows against the Japanese currency on Monday, falling below 95 yen for the first time in more than a decade.

The common currency, which has been under pressure over fears about the eurozone's fiscal problems, dipped as low as 94.91 yen in morning Asian trade -- its lowest level since November 2000 -- from 95.38 in New York trade on Friday.

The euro was also weak against the dollar, treading around two-year lows at US$1.2119, while the dollar bought 78.33 yen.

The Japanese currency, which hit record highs against the dollar last year, has been increasingly viewed as a safe-haven unit amid worries about Europe and a lumbering US economic recovery.

Officials in Tokyo have repeatedly warned that the yen was overvalued and have previously intervened in forex markets in a bid to bring down the soaring unit's value.

"My stance on foreign exchange is unchanged and will never change under any circumstance," Japanese Finance Minister Jun Azumi told reporters in Tokyo Monday, according to Dow Jones Newswires.

"As I've been saying, I will take decisive steps against speculative movement of excessive volatility. As far as the current situation is concerned, I'm watching it carefully," he added.

S'pore remains key market for Britain

SINGAPORE: Despite a global slowdown, exports from the United Kingdom to Singapore rose 11 per cent on-year to S$7.13 billion in 2011.

With prospects in the Eurozone becoming bleaker, Singapore remains a key market for Britain not just as a trading partner but as a jump-off point for the smaller companies it wants to bring to Asia.

Consumer electronics firm Dyson is among the more than 700 British firms with operations in Singapore where it operates its research and development unit for its digital motors, bladeless fans and hand dryers.

Dyson's products are sold in over 50 countries and it invests S$2 million a week to develop new technology.

The UK Trade and Investment (UKTI) believes such strength in high technology will open doors for British firms in Asia.

It sees potential in markets like Indonesia, Malaysia and Thailand where firms can bring their expertise in transport systems, architecture and design.

Nick Baird, chief executive of UKTI, said: "The key message to companies is that they need to diversify where the international activity is. Although Britain has been very successful among developed countries... we take only 1.2 per cent of the imports of the major emerging economies of the world. We have to address that. We have to take more British companies exporting to and investing in the growth regions of the world."

A spike in British investments in the region could boost business for UK firm Faithful+Gould.

The construction consultancy firm set up in Singapore in 1988 to help clients venturing into the Far East.

Faithful+Gould's regional director Martin Riddett, said: "Asia is an important market for a lot of clients nowadays and growing so, especially with the economic situations in Europe and the United States not being so good. So as the clients are looking to invest in Asia more and more, we support them in helping them make good value of their projects."

The UKTI said it plans to work closely with Singapore via joint trade missions to tap new markets in China and Myanmar.

Singapore is the UK's largest trading partner in Southeast Asia. The two country's similarity as an open, transparent and highly-regulated economy makes it easier for UK firms to start business in Singapore, the UKTI said.

On the other hand, Singaporean firms have also made headway with their investments in the UK, particularly in the areas of integrated utilities and services, renewal energy, banking and financials and food & beverages.

Mr Baird believes the spate of financial scandals, like the LIBOR fixing, should not have an impact on the attractiveness of Britain as an investment destination, adding that London remains a key financial centre that is interconnected with Asia and the world.

Asian markets slip on US losses, Europe woes

HONG KONG - Asian markets fell on Thursday as dealers followed losses on Wall Street while selling pressure was also stoked by fears over Spain and nervousness ahead of crucial Greek polls at the weekend.

Tokyo fell 0.69 per cent, Hong Kong lost 0.74 per cent, Sydney eased 0.86 per cent, Shanghai gave up 0.51 per cent and Seoul was 0.14 per cent lower.

With the eurozone's $125 billion loan for Spain's banking sector almost a distant memory, the country has seen its borrowing costs surge to unsustainable levels and traders are growing concerned about its own financial state. On Wednesday Madrid was dealt another blow when Moody's slashed its credit rating by three notches to just one level above junk status, saying the bailout will add to an already shaky debt position.

Spanish 10-year government bonds yields - the rate of return earned by investors - spiked to 6.834 per cent on Tuesday, the highest since the eurozone was founded, and was still sitting at 6.712 Thursday. Anything above 6.0 per cent is considered too high to continue servicing its debts for the medium term and point to investors' concerns about Spain's future as unemployment sits at record highs and public debt rockets.

Eyes are also on Sunday's elections in Greece - its second in six weeks - with dealers fearing a victory for anti-austerity parties that could lead to Athens tearing up a bailout deal, which in turn would likely lead it to exit the eurozone.

French President Francois Hollande said in an interview with Greek Mega Channel television that if it appears from the vote that they do not want to respect the bailout deal "there will be countries in the eurozone which would prefer to end Greece's presence in the eurozone."

In a transcript of the interview provided by his office he added that "the abandoning pure and simple of the (bailout and austerity) memorandum would be seen by many eurozone members as a break up".

The euro bought $1.2560 in early trade, slightly up from $1.2556 in New York late Wednesday. The common currency was fetching 99.76 yen against 99.78 yen.

The dollar was at 79.42 yen against 79.46 yen.

On Wall Street the major indexes fell on the European concerns as well as weak domestic figures.
The Dow closed down 0.62 per cent, the S&P 500 lost 0.70 per cent and the Nasdaq slipped 0.86 per cent.

Traders went into selling mode after May retail sales fell 0.2 per cent from April, and excluding autos shed a heftier 0.4 per cent, the Commerce Department reported.

New York's main contract, light sweet crude for delivery in July, was down 14 cents to $82.48 a barrel and Brent North Sea crude for July delivery shed 23 cents to $96.90.

Gold was worth $1,617.80 an ounce at 0220 GMT, compared with $1,609.60 late Wednesday.

Asian stocks, euro rise as Spain banks get lifeline

HONG KONG: Asian markets and the euro rallied Monday after the eurozone agreed to lend Spain up to US$125 billion to save its banks, but analysts warn the deal is just a sticking plaster for Europe's wider problems.

The weekend also saw China release a mixed bag of data that, despite not being as bad as expected, was unable to soothe dealers' concerns over the world's second biggest economy. But it did provide hope that Beijing will introduce more easing measures.

Tokyo surged 1.96 percent, or 165.64 points, to 8,624.90 and Seoul jumped 1.71 percent, or 31.40 points, to end at 1,867.04.

Hong Kong climbed 2.44 percent, or 451.29 points, to 18,953.63 and Shanghai gained 1.07 percent, or 24.41 points, to 2,305.86.

Taipei rose 1.72 percent, or 120.58 points, to 7,120.23.

Manila closed 1.64 percent higher, adding 81.78 points to 5,075.85.

Sydney was closed for a public holiday.

On forex markets the single currency bought US$1.2630 and 100.50 yen against US$1.2514 and 99.49 yen in New York on Friday.

The US dollar was trading at 79.57 yen from 79.49 yen.

After an emergency video conference lasting more than two hours on Saturday, eurozone finance ministers issued a statement saying they were "willing to respond favourably" to a Spanish plea for help for its stricken lenders.

Spain's Economy Minister Luis de Guindos insisted the handout was not a rescue but a loan that imposes conditions on the banks.

However, it marked a dramatic climbdown for Madrid, which recently denied it needed any outside aid.

EU Economic Affairs Commissioner Olli Rehn said the Spain deal was critical to reassure jittery markets.

"It is a very clear signal to the market, to the public, that the euro (area) is ready to take decisive action in order to calm down market turbulence and contagion," Rehn said.

Stock markets in Europe opened sharply higher on Monday.

In the first few minutes of trade Madrid soared 5.8 percent, with Bankia -- the lender that asked the government for billions of dollars in aid -- rocketing almost 20 percent.

London's FTSE rose 1.80 percent, the Paris CAC 40 surged 1.98 percent and Frankfurt added 2.04 percent.

Monday's surge in the stock markets marked a rebound from recent weeks as traders have become nervous about Spain's precarious financial position as well as a possible Greek exit from the euro area.

The deal was hailed by Germany, France, Japan, China and the United States as well as the International Monetary Fund.

"Sentiment is in a risk-on mode and the news is giving the market a sense of relief," Kengo Suzuki, currency strategist at Mizuho Securities, said.

But Goldman Sachs warned that there were still problems in the eurozone's financial system.

"(It's a) positive near-term development for Spain, and in particular for its banks. But it does not solve Spain's overall fiscal and macroeconomic challenges, which remain substantial", Goldman said in a research note.

It added that the region's crisis "continues to be addressed on a country-by-country basis rather than at a systemic level".

Yuji Saito, director of foreign exchange at Credit Agricole Bank in Tokyo, said questions also remained about details of the bank deal, as uncertainty looms over Greek elections aimed at ending a political stalemate in the debt-riddled nation.

"The agreement won't solve the debt concerns completely because the question remains how and who will give money to Spain, and of course the Greek election next week," Saito told Dow Jones Newswires.

Despite efforts by policymakers, the eurozone crisis has now spread to the region's fourth-biggest economy -- Spain's is twice the combined size of those of Greece, Ireland and Portugal, which have also needed a bailout.

Spain finally sought aid as its borrowing costs on the open markets soared and the price for fixing the banks' balance sheets, heavily exposed to a property bubble that burst in 2008, spiralled.

In China the government said Saturday that inflation eased to a slower-than-forecast 3.0 percent in May while industrial output grew at 9.6 percent year-on-year, also weaker than expected.

And on Sunday figures showed that exports and imports shot up 15.3 percent and 12.7 percent respectively last month.

The numbers will give policymakers room to ease monetary policy further and come days after Beijing cut interest rates for the first time since the end of 2008.

The news from Europe helped oil post big gains.

New York's main contract, light sweet crude for delivery in July, soared US$1.63 to US$85.73 per barrel in afternoon trade. Brent North Sea crude for July delivery added US$2.63 to
US$101.10.

Gold was at US$1,697.50 an ounce at 0810 GMT, compared with US$1,577.05 late Friday.

Oil retreats on profit-taking, weak eurozone data

SINGAPORE: Oil retreated in Asian trade on Tuesday as investors took profits from overnight gains, while weak eurozone manufacturing data also pressured prices, analysts said.

New York's main contract, West Texas Intermediate crude for delivery in May, shed 28 cents to $104.95 per barrel while Brent North Sea crude for May settlement was down 36 cents at $125.07 in morning trade.

Prices had surged in late trade on Monday, supported by stronger-than-expected industrial data in the United States, the world's biggest oil user.

"There has been some profit-taking... from the price surge brought on by US manufacturing data," said Victor Shum, senior principal at Purvin and Gertz international energy consultants in Singapore.

"The manufacturing data that came out from Europe were quite weak, and that has offset the US data and is weighing on prices," he told AFP.

A purchasing managers index (PMI) compiled by Markit research firm showed that eurozone manufacturing activity slumped to a three-month low in March, with major economies Germany and France hit by the slowdown.

The index, a survey of 3,000 eurozone manufacturers, fell to 47.7 points in March, down from 49 points in February.

A score below 50 indicates contraction.

A decline in new orders and rise in oil prices, which weighed on production costs, contributed to the decline in eurozone manufacturing activity, the research firm said.

There were "further signs that the manufacturing malaise already exhibited at the periphery of the currency bloc was spreading to the core," it added.

Eurozone agrees to unlock 8b euro loan for Greece

BRUSSELS: Eurozone finance ministers on Friday agreed to unlock an eight-billion-euro slice of aid to help debt-laden Greece, EU diplomats said.

Ministers of the 17-nation eurozone "have given their agreement for the sixth tranche of aid to Greece," the diplomat said, referring to debt funding provided in a 110-billion-euro rescue package for Greece agreed in May 2010.

A second diplomat confirmed the breakthrough.

The tranche of aid is crucial for debt-stricken Greece which faced running out of money to pay civil servants and pensions in mid-November.

It had been blocked since mid-September as a team of EU, European Central Bank and International Monetary Auditors scrutinised the Greek government's reform efforts.

On Thursday, the Greek parliament approved a controversial government list of even tougher austerity measures demanded by the auditors and which have sparked violent street protests.

Some 35,000 people gathered in Athens on the second day of a general strike on Thursday that crippled the public sector and much of the country.

The protests turned violent and police said a man in his fifties died in hospital. Authorities declined to speculate on the cause of death, but Greek media said he was hurt on the sidelines of the protests.

Another key sticking point is how much of Greece's debt mountain can safely be written off without spreading the debt crisis to other under-pressure economies such as Italy and Spain.

This pivotal point, however, is unlikely to be resolved before a meeting of EU leaders on Wednesday, amid differences between France and Germany over the "haircut" to be applied to Greece's 350 billion euros of debt.