Asian markets up on US hopes, weak yen helps Tokyo

HONG KONG: Asian markets rose on Wednesday with traders confident the United States will avoid a fiscal cliff and Greece will get its much-needed bailout, while Tokyo was boosted by the weak yen.

The Japanese currency continued its fall against the dollar and the euro on expectations of further central bank easing, given added impetus by data showing Tokyo posted its worst October trade figures in more than 30 years.

Tokyo rose 0.96 per cent, Hong Kong added 0.66 per cent and Seoul was up 0.30 per cent but Sydney was flat. Shanghai was up 0.21 per cent.

Stocks have been buoyed this week by hopes for an agreement in Washington on avoiding the fiscal cliff of tax hikes and spending cuts scheduled to come into effect on January 1.

If they are allowed to come in they will likely tip the US into recession, a danger reiterated by Federal Reserve chief Ben Bernanke on Tuesday.

Eyes are currently on Europe, where eurozone finance chiefs are holding an emergency meeting to decide whether to give Greece the next trance of much-needed bailout cash to help it avoid a default.

"Greece has delivered (on reform)," said Jean-Claude Juncker, who presides over the Eurogroup of finance ministers from the 17 countries that use the single currency. "(There are thus) good chances of an agreement."

The expectations of fresh cash for Greece lifted the euro against the yen, while it is also holding on to recent advances on the dollar.

The euro bought $1.2810 and 104.95 yen in early Asian trade, compared with $1.2818 and 104.70 yen in New York late Tuesday.

The dollar firmed to 81.93 yen from 81.67 yen in US trade and is sitting at seven-month highs.

Dealers continued to move out of the yen after the Bank of Japan held off further monetary easing on Tuesday but signalled fresh action could be in the pipeline after saying the economy remained weak.

The currency has weakened since last week, when the man likely to become prime minister after next month's general election said he would push for unlimited loosening monetary policy by the central bank.

There was more gloom for the Japanese economy on Wednesday as finance ministry data showed October's trade deficit nearly doubled to 549 billion yen ($6.7 billion) from a year ago, coming on top of weakening factory output.

On Wall Street, the three main indexes all ended flat on weak corporate news.

However, there was support from the Commerce Department, which said home construction rose again in October following September's strong surge, a further sign of recovery in the crucial housing market.

Housing starts rose 3.6 per cent from October, surprising analysts who had expected a fall after September's jump.

Oil prices climbed, with New York's main contract, light sweet crude for delivery in January, rising 55 cents to $87.30 a barrel and Brent North Sea crude for January delivery adding 63 cents to $110.46.

Gold was at $1,727.60 at 0230 GMT compared with $1,733.45 late Tuesday.

Asian markets up on US jobs data

HONG KONG - Asian markets rose Friday following another set of promising jobs data from the United States, while dealers were also upbeat ahead of the release of closely-watched Chinese economic figures.

Japanese shares, however, were hit by a plunge in telecom giant Softbank after it emerged it is eyeing a near $13 billion (S$15.9 billion) deal to buy Sprint Nextel of the United States, in what would be one of Japan's biggest ever overseas deals.

Tokyo was flat by the break, Hong Kong added 0.82 percent, Sydney gained 0.17 percent, Shanghai climbed 0.60 percent and Seoul rose 0.12 percent.

The gains come at the end of a week that raised new fears about the global economy, with the International Monetary Fund slashing its growth forecasts across the world, while Spain continues to refuse to ask for a bailout.

Hopes for the US economy were given another boost Thursday when the Labor Department said insurance benefits plunged unexpectedly last week to the lowest level since February 2008.

New jobless claims, a sign of the pace of layoffs, came in at 339,000 in the week to October 6, far below the previous week's 369,000 and the then-four-week average of 375,500.

Those figures come on top of data last week showing the unemployment rate had fallen to 7.8 percent in September.

However, on Wall Street the Dow fell 0.14 percent while the Nasdaq and S&P 500 were both flat.

Eyes are now on China, which will release on Saturday its trade figures for September, with investors hoping for an improvement on recent months that have revealed tumbling exports and imports as the demand in key markets dries up.

Beijing will on Monday release inflation data, followed by crucial gross domestic product figures.

Traders are also hoping leaders will soon introduce a fresh round of stimulus as a once-in-a-decade leadership transition approaches next month.

In Tokyo, broad advances stoked by a weak yen were held back by a 16 percent slump in Softbank, the country's third biggest telecoms firm, after it said it was in talks to buy Sprint for $12.8 billion.

Kenji Shiomura, strategist at Daiwa Securities, said: "Investors were discouraged by the possibility that the company could be saddled with a heavy financial burden".

"Putting aside the point of whether the deal could be successful in the long run, the market is cautious."

On forex markets the euro benefited from increased risk sentiment. In early trade it bought $1.2939, compared to $1.2926 late Thursday in New York, while it was also up at 101.53 yen from 101.25 yen.
The dollar gained to 78.49 yen from 78.33 yen.

Oil prices were higher with New York's main contract, light sweet crude for delivery in November rising 29 cents to $92.36 a barrel and Brent North Sea crude for November advancing 10 cents to $115.81.

Gold was at $1,769.98 at 0325 GMT compared with $1,770.18 late on Thursday.

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.

Asian markets mostly up on US data

HONG KONG: Asian markets were broadly higher Tuesday following a bright lead from Wall Street on strong US manufacturing data, but Tokyo exporters were hit as the yen rebounded from a recent sell-off.

Another set of weak eurozone figures indicating the troubled region is headed for recession sent traders running for the safety of the Japanese currency at the expense of the euro and the dollar.

Tokyo eased 0.41 percent by the break but Hong Kong rose 0.57 percent, Sydney added 0.29 percent and Seoul was 0.84 percent higher.

Shanghai was closed for a public holiday.

US manufacturing activity accelerated in March, with the closely watched Institute for Supply Management purchasing managers index (PMI) hitting 53.2 last month, up from 52.4 in February.

A reading above 50 indicates growth while anything below suggests contraction.

The data came a day after China's official PMI showed a surprise surge to a one-year higher, providing some much-needed relief from recent concerns about a severe slowdown in the world's number two economy, a key engine of global growth.

The news lifted Wall Street on its first day of trading in the new quarter, with the Dow adding 0.40 percent, the S&P 500 up 0.74 percent and the tech-rich Nasdaq climbing 0.91 percent.

However, optimism was tempered by dour European PMI figures, which showed manufacturing at a three-month low of 47.7 in March, from 49 in February.

Adding to the gloom was the announcement that eurozone unemployment hit a 15-year high of 10.8 percent in February, up from 10.7 percent the previous month.

The results tempered sentiment after Friday's agreement between eurozone finance ministers to boost their firewall against further debt crises to about 800 billion euros ($1.1 trillion).

The weak European figures sent the yen higher against the euro and dollar amid renewed risk-aversion.

The dollar was changing hands at 81.90 yen in early Asian trade, down from 82.06 yen in New York late Monday and rates above 83.00 yen in Asia.

The euro fetched $1.3343 and 109.26 yen, compared with $1.3319 and 109.32 yen in New York. The single currency had been trading around 111.00 yen in Asia Monday.

Eyes are also on several key events later in the week, including policy committee meetings for the European, British and US central banks and the release of US unemployment figures.

On oil markets New York's main contract, West Texas Intermediate crude for delivery in May, shed 17 cents to $105.06 per barrel while Brent North Sea crude for May settlement was down 25 cents at $125.18.

Gold was at $1,677.20 an ounce at 0300 GMT, compared with $1,664.25 late Monday.

Proceed with care in Asian investments

Q: Asian markets are at extremely cheap levels now. Do you think it is a good time for investors to enter this market? 

A: Using the MSCI Asia ex-Japan Index as a gauge, Asian markets are indeed at very attractive valuations. From a price-to-earnings perspective, the market is currently at its lows compared to the last 35 years. Further, from the angle of price-to-book ratio, Asia is also well below its long-term average of 1.8x at current levels.

Despite the cheap valuation, it may be too soon to jump back into a high beta market like Asia: the global headwinds stemming from the crisis in Europe, as well as the slowdown in the US and China, have shown few signs of easing.

However, it is also advisable for investors to maintain a balanced and diversified portfolio during these volatile times. Although risk aversion remains intact, investors interested in gaining exposure to the Asian equity market can consider the defensive sectors. These sectors may help manage downside risk of a portfolio.

Additionally, defensive companies are less sensitive to economic cycles as they produce items that are needed by consumers irrespective of economic circumstances. Another enticing aspect will be that of sustainable dividends which may help ease downward pressure from the market by adding a premium over steady income.

Investors can also consider dollar cost averaging (DCA) to gain exposure to Asian markets. This is a disciplined and convenient approach where investors reduce the need to time the market. In addition, it may help reduce investment costs and boost potential returns when the market turns for the better.

The foundation of successful investing remains educating and familiarising oneself with the various aspects of the market. Investors should also conduct due diligence to back each investment decision. It is also advisable to speak to a qualified financial adviser to truly understand the risk before investing in the market.