Asian shares up, dollar rallies in thin trade

September 9, 2014

Asian shares were mixed Tuesday but Tokyo extended a recent rally after the yen hit a six-year low against the dollar.

In currency markets the pound struggled to recover from the previous day’s sell-off fuelled by fears of Scottish independence.

Tokyo’s gains came despite a soft lead from Wall Street, while overall Asian trade was quiet owing to public holidays in Hong Kong and Seoul.

Tokyo gained 0.28 percent, or 44.04 points, to 15,749.15 and Sydney rose 0.55 percent, or 30.9 points, to close at 5,607.9. Shanghai ended marginally higher, adding 0.10 points to 2,326.53.

Japanese exporters were the main winners in early trade, a day after the dollar broke above the 106 yen level for the first time since the height of the financial crisis in October 2008.

The greenback picked up in New York after Friday’s disappointing US jobs data was put into perspective by another round of weak Japanese growth figures and anaemic Chinese trade statistics.

“I think we should conclude that the dollar-yen rate is breaking above 105 in a sign that suggests the market is factoring in expectations for further monetary easing on the Japanese side,” said SMBC Nikko Securities strategist Chotaro Morita.

However, equities markets on Wall Street were less strong. The Dow eased 0.15 percent Monday and the S&P 500 fell 0.31 percent while the Nasdaq edged up 0.20 percent.

John Kicklighter, chief currency strategist at DailyFX, said the dollar’s latest rise was due “less to the dollar’s own intrinsic merits and more to the exceptional weakness of its counterparts”.

The dollar fetched 106.35 yen in Tokyo trading Tuesday compared with 106.03 yen in New York.

The euro was under pressure after the European Central Bank last week announced a fresh rate cut and easing measures. The single currency bought $1.2872 — a 14-month low — and 136.89 yen against $1.2895 and 136.72 yen in New York.

The pound was stuck at a 10-month low against the dollar after tumbling Monday in response to a survey showing a majority in favour of independence for the first time.

The British pound bought $1.6084, its weakest since November and well down from $1.6323 on Friday before the survey. The news has given a jolt to investors who had not envisaged a victory for the “Yes” campaign and so had not priced in the effects of a break-up of the UK.

On oil markets US benchmark West Texas Intermediate for October delivery rose 48 cents to $93.14 while Brent crude for October was off 20 cents at $100.00.

Gold was at $1,253.52 an ounce, against $1,265.51 late Monday.

In other markets:

– Wellington fell 0.34 percent, or 18.05 points, to 5,243.70.

Air New Zealand was down 1.78 percent at NZ$2.21 and Spark slipped 0.65 percent to NZ$3.08.

– Taipei rose 0.29 percent, or 26.83 points, to 9,434.77.

Taiwan Semiconductor Manufacturing Co was unchanged at Tw$127.0 while Hon Hai Precision was up 1.49 percent at Tw$102.0.

– Manila slipped 0.84 percent, or 61.27 points, to 7,253.67.

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