Asia markets mostly up as oil climbs, Nikkei down 1.3% on strong yen

Tomohiro Ohsumi | Bloomberg | Getty Images

Asian markets traded mostly traded higher Friday, after U.S. indexes ended higher and oil prices hit their highest levels for this year. But a stronger yen continued to weigh on Japan's shares.

Australia's S&P/ASX 200 finished up 0.29 percent, or 14.947 points, at 5,183.1, boosted by a 1.67 percent gain in its materials subindex and energy subindex which advanced 0.77 percent.

In China, the Shanghai Composite closed up 1.72 percent, or 50.102 points, at 2,954.934, and the Shenzhen Composite ended up 3.66 percent, or 64.78 points, at 1,837.21. Hong Kong's Hang Seng index finished up 0.82 percent, or 167.82 points, at 20,671.63.

In South Korea, the Kospi closed higher 0.21 percent, or 4.13 points, at 1,992.12.

Bucking the trend, Japan's benchmark Nikkei 225 closed down 1.25 percent, or 211.57 points, at 16,724.81, extending its fall for a fourth straight session. The Index is down 1.26 percent for the week.

The dollar/yen pair was at 111.42 at 1:44 p.m. HK/SIN time after dipping as low as 110.80 earlier, remaining well below the 113 handle, where it was trading before the Federal Reserve policy announcement earlier this week. A stronger yen is generally a negative for Japanese stocks as it reduces the value of overseas profits when they're translated into the home currency.

Major Japanese exporters lost ground in Asian trade, with Toyota lower by 2.27 percent, Nissan down 1.76 percent and Honda shedding 1 percent. Japanese electronics giant Toshiba was resiliently up 4.28 percent despite the company's announcement that its U.S. units were under investigation over accounting-related matters, reported Reuters in early Asian trade.

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Helping to drive market gains, oil prices jumped to their highest levels this year as the dollar weakened and talk continued about an April 17 meeting of OPEC kingpin Saudi Arabia and non-OPEC producers, including Russia.

U.S. benchmark WTI had closed above $40 for the first time this year in overnight trade on Thursday, advancing $1.75 to end the U.S. session at $40.20 a barrel, its highest close since December 3.

In early Asian trading, U.S. light crude gained 0.15 percent to $40.26 a barrel, while global benchmark Brent crude was mostly unchanged at $41.57 a barrel after hitting a 2016 high of $41.60 in the U.S. session.

Energy plays around the region were mostly higher. Australia's Santos was higher by 1.75 percent and Woodside Petroleum rose 1.69 percent, but Oil Search was lower by 1.13 percent. In Japan, Inpex climbed 1.31 percent, and Japan Petroleum Exploration was up 0.51. Chinese mainland energy plays were mixed, with Sinopec Shanghai Petrochemical up 0.15 percent, China Petroleum higher by 0.21 percent and PetroChina down 0.13 percent.

In the currency market, the People's Bank of China (PBOC) set the yuan midpoint rate at 6.4628 against the dollar, 0.5 percent higher than Thursday's fix. Reuters reported that this is the biggest daily rise to the yuan fix since November 2015.

"The [yuan] fix is coming in stronger than the markets had expected, and a gap move below 6.45 dollar-offshore yuan ensued," Stephen Innes, senior trader at OANDA Asia Pacific, said in a Friday note. "Today's yuan fixing plays into the notion that an imminent yuan devaluation is fading into the background."

The greenback, meanwhile, weakened to a five-month low after the Federal Reserve said on Wednesday that it expected two rate hikes in 2016, not the four predicted earlier.

The dollar index closed overnight at 94.760, compared with its 96.642 close the day before the Fed statement. That helped to boost the prices of commodities, which are denominated in dollars.

In Australia, major resource producers were trading higher, with Rio Tinto shares up 0.96 percent, Fortescue Metals surging 3.77 percent and BHP Billiton 4.68 percent higher.

Investors were digesting news China's February home prices rose by 3.6 percent, which Reuters reported is its highest rise since June 2014. Property stocks were mixed. Among Hong Kong-listed property plays, China Resources Land gained 0.97 percent and Shimao Property added 2.38 percent, while China Vanke shed 1.71 percent.

Major U.S. indexes all closed up, with the Dow Jones industrial average up 0.9 percent, the S&P 500 up 0.66 percent and the Nasdaq composite finishing up 0.23 percent.

In South Korea, in what is known as the "Super Shareholders Meeting" day, 333 South Korean companies will hold their annual general meetings (AGMs), with markets likely to eye news out of Kia Motors, LG Chem and SK Group.

-- Reuters contributed to this report.

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