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Asia markets mostly higher; Nikkei edges up despite yen strength

Most Asian markets rose on Thursday, with Japan's benchmark index snapping a seven-day losing streak despite fresh strength in the yen.

Japan's Nikkei 225 closed up 34.48 points, or 0.22 percent, at 15,749.84, after wavering between positive and negative territory throughout the session as the yen climbed.

Among other markets, Australia's ASX 200 added 18.16 points, or 0.37 percent, to 4,964.08. South Korea's Kospi gained 2.57 points, or 0.13 percent, to 1,973.89.

Mainland Chinese markets lost ground, with the Shanghai composite closing down 41.08 points, or 1.35 percent, at 3,009.51, while the Shenzhen composite was off by 31.44 points, or 1.6 percent, at 1,930.26. Hong Kong's Hang Seng index ended up 59.38 points, or 0.29 percent, at 20,266.05.

The subdued performance in Asia was in contrast to solid gains in U.S. equities overnight in the wake of the release of the most recent Fed meeting minutes, which set a relatively dovish tone.

"The release of the Fed minutes overnight largely confirmed that there will not be a rate rise in April, and there's little in the statement or recent U.S. data that pushes strongly for a rate rise in June either," Angus Nicholson, market analyst at spreadbettor IG, said in a note Thursday.

"Initially, this news was greeted positively early in Asian trade, but the region's concern soon returned to the impressive resurgence in the strength of the yen."

Symbol
Name
Price
 
Change
%Change
NIKKEI
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HSI
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ASX 200
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SHANGHAI
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KOSPI
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CNBC 100
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During Asian hours, the Japanese yen surged against the dollar to levels not seen since before October 31, 2014, when the Bank of Japan (BOJ) expanded its quantitative easing program by an additional 30 trillion yen ($275.91 billion) to 80 trillion yen annually. The dollar/yen pair traded at 108.60 as of 4:15 p.m. HK/SIN time, after falling as low as 108.49 earlier. That's down from levels above 112 last week.

Major Japanese exporters mostly ended lower. Shares of Toyota, Nissan, and Honda were off between 0.21 and 0.6 percent, but Panasonic added 1.02 percent. A stronger yen affects the profitability of major exporters as it reduces their overseas profits when converted into local currency.

Kathy Lien, managing director of foreign exchange strategy at BK Asset Management, wrote in a note that despite the drop in the dollar/yen pair overnight, there have been no signs of the BOJ in the market in an effort to weaken the currency. Lien said this is "worrisome because it suggests that their pain threshold for yen strength could be much higher."

Heavily weighted Fast Retailing sold off 3.63 percent, before announcing earnings results after market close. Reuters reported the retailer cut its outlook on Thursday after price cuts at its clothing chain Uniqlo hurt quarterly profit. In its fiscal second quarter through February, Fast Retailing reported operating profit of 23.4 billion yen ($215 million), down from 58.7 billion in the same period a year earlier, said Reuters.

Overnight, the Federal Open Market Committee March meeting minutes showed several policymakers expressed caution over a potential April hike, while some said that it might be warranted. Analysts said the tone of the minutes generally reinforced the dovish remarks from U.S. Federal Reserve Chair Janet Yellen on March 29 that the central bank would proceed cautiously with rate hikes.

That helped keep the dollar under wraps, with the dollar index, which measures the greenback against a basket of currencies, remaining at the 94 handle. The index traded at 94.42 Thursday afternoon as of 4:22 p.m. HK/SIN time.

Down Under, the Australian dollar traded at $0.7581 in the evening local time.

The Chinese yuan also strengthened slightly against the greenback, with the dollar/yuan pair trading at 6.4716 in the afternoon local time.

Kazuhiro Nogi | AFP | Getty Images

Oil prices advanced during Asian trading hours, with U.S. crude futures higher by 0.48 percent at $37.93 a barrel as of 4:25 p.m. HK/SIN, following an overnight gain of 5.18 percent. Global benchmark Brent was up 0.75 percent at $40.14, after adding 5.2 percent during U.S. trading hours.

The overnight boost in oil came after data from the Energy Information Administration (EIA) showed crude stockpiles dropped by 4.9 million barrels last week, Reuters reported. Analysts polled by the news wire had expected an inventory build up of 3.2 million barrels.

Energy plays across Asia were mixed, with Santos adding 3.52 percent, Woodside Petroleum gaining 1.83 percent and Inpex adding 2.8 percent. Mainland Chinese oil stocks were lower, with Sinopec shedding 1.26 percent.

In corporate news, shares of smartphone giant Samsung Electronics closed down 1.25 percent. Earlier in the day, the company announced earnings guidance for the first quarter of 2016. Samsung said its operating profit was approximately 6.6 trillion won ($5.7 billion) for the January-March quarter, up 10 percent from a year ago in the same time period. But analysts were concerned that the quarter may mark an earnings peak for the year, Reuters reported.

Shares of troubled Japanese airbag manufacturer Takata were off 1.42 percent, following reports on Wednesday that said a 17-year-old driver of a recalled 2002 Honda Civic was killed last month in Fort Bend County, Texas.

Major U.S. indexes advanced overnight, with the Dow Jones industrial average closing up 0.64 percent, the S&P 500 adding 1.05 percent and the Nasdaq composite higher by 1.59 percent.

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