Korean Exporters Lift Asia Shares Higher
A near 2 percent rally in Korean exporters and robust gains in Japan and Australia propelled Asian stock markets to fresh highs on Wednesday as global risk appetite improved after a firm lead from Wall Street overnight and stronger-than-expected German investor sentiment data.
Seoul shares, stuck in a narrow range for a most a week, broke well-above the 2,000-mark to a 7-week high. Japanese stocks hit a 52-month high and Chinese markets rallied 0.6 percent to nudge closer to a 9-month high hit earlier this week.
Australian stocks meanwhile extended recent gains to hit a fresh four-and-a-half year high, continuing a bull-run that's seen the S&P ASX 200 add more than 17 percent in the past three months.
Seoul exporters such as automakers and tech firms, which constitute roughly half of the South Korea's economic output, cheered a pull-back in the won's recent strength versus the yen.
The weak yen gives Japanese exporters a competitive edge against Korean rivals but as of Wednesday, the Japanese currency edged higher against the dollar, well off Monday's peak of 94.20.
Auto majors Hyundai Motor and Kia Motor benefited, up 3 percent and 2 percent respectively. Amid tech shares, Samsung Electronics rallied over 3 percent while LG Display soared 5 percent.
Japan's Nikkei 225 rose 0.8 percent but concerns about who the government will nominate as the next central bank governor appear to be reigning in the market's recent rally.
Expectations of strong monetary easing in Japan, which have driven the yen lower, have lifted the Nikkei and financial markets are waiting to see if Prime Minister Shinzo Abe, who has demanded a more aggressive monetary policy, nominates a candidate who will support bold policy action.
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In Australia, shares of BHP Billiton fell 0.9 percent after the world's largest miner appointed a new chief executive on Wednesday to replace Marius Kloppers, who will step down in May. BHP also reported a 43 percent drop in half-year profit early Wednesday, its worst half-year slide in more than a decade.
Chinese markets pared earlier losses to bounce back 0.6 percent after foreign direct investment in January fell over 7 percent from the month earlier. However, investors say China faces a greater problem than slowing inflows: excess liquidity, which is sparking concerns that Beijing may embrace new tightening measures.
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"When you have central banks in the U.S., Europe and Japan all printing money in an effort to stimulate their economies with low interest rates, that has the effect of pushing liquidity into other markets, particularly China so they (policymakers) are beginning to struggle with trying to keeping a lid on that," said Kingsley Jones, founder and CIO at Jevons Global.