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Asia closes mixed; Nikkei reverses losses to close up 0.4%

Major Asian stock indexes dropped modestly Thursday, taking cues from declines in U.S. stocks after a string of top-flight retail companies released disappointing earnings.

The U.S. market falls came despite gains in oil prices on better-than-expected inventories data. Shares of Disney had their worst day since Jan 15, while Macy's closed down almost 15.2 percent.

In Australia, the benchmark ASX 200 closed down 12.99 points, or 0.24 percent, at 5,359.30, led by a 0.88 percent decline in the financials sub-index, which makes up nearly 50 percent of the broader benchmark.

Some of Australia's major banks came under pressure, with shares of ANZ closing down 0.53 percent and Westpac tumbling 3.58 percent. The Commonwealth Bank of Australia and the National Australia Bank, on the other hand, closed up 0.32 and 1.07 percent, respectively.

The Australian Financial Review (AFR) reported that the country's financial regulator, the Australian Securities and Investments Commission (ASIC), was preparing to lodge a longer statement of claim against Westpac on Friday.

The regulator had previously accused Westpac of market manipulation related to the setting of the bank bill swap reference rate between April 2010 and June 2012, the AFR reported. Westpac has reportedly denied the allegations, and accused ASIC of failing to understand interest rate risk management practices.

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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Japan's Nikkei 225 reversed morning losses to close up 67.33 points, or 0.41 percent, at 16,646.34. Across the Korean Strait, the Kospi ended down 2.61 points, or 0.13 percent, at 1,977.49. In Hong Kong, the Hang Seng index was down 0.66 percent as of 2:44 p.m. HK/SIN.

Chinese markets ended near flat, with the Shanghai composite at 2,836.73, and the Shenzhen composite at 1,790.

Shares of Toyota pared some of their over 4 percent losses in early morning to close down 1.44 percent, after the automaker reported its full-year 2016 earnings on Wednesday at market close. While net income for the financial year that ended March 31 was up 6.4 percent on-year, Toyota said it expected a 35.1 percent decline in net income for the full-year 2017.

Other Japanese automakers ended mixed on Thursday, with shares of Honda down 0.59 percent, Mazda reversing losses to close up 1.4 percent and Nissan down 1.44 percent.

Reuters citing sources reported Nissan is set to take a key stake in Mitsubishi Motors, which has come under pressure after admitting to cheating on mileage tests. After market close, Mitsubishi Motors said it will issue new shares to Nissan, which will see the latter own 34 percent of Mitsubishi Motors, according to Reuters.

Meanwhile, troubled air bag-maker Takata saw its shares climb up 12.69 percent, after reports that the company expected to be profitable for the financial year that started in April 2016. The company reported a net loss of 13.1 billion yen ($120 million) for the year ended March 31 on Wednesday, according to Reuters.

Down Under, shares of department store chain Myer closed up 6.67 percent, after the company announced sales figures for the 13 weeks through April 23. The company's sales for the period were up 2.1 percent to 675.5 million Australian dollars ($495.41 million) and year-to-date total sales increased 1.9 percent to A$2.47 billion.

In Singapore, shares of telecommunication giant Singtel were up 0.26 percent in the afternoon, after the company reported earnings for the financial year ended March 31, 2016. Full year net profit was up 2.4 percent to 3.87 billion Singapore dollars ($2.83 billion), while free cash flow fell by 23.4 percent to S$2.72 billion due to increased investments.

Kazuhiro Nogi | AFP | Getty Images

The dollar lost ground in the currency market overnight, with the dollar index, which measures the dollar against a basket of currencies, slipping to the 93 handle. As of 2:53 p.m. HK/SIN, the index was at 93.924.

"The lack of key data releases, weaker risk appetite and the lure of profit taking after six consecutive days of gains were the most apparent drivers for a softer dollar overnight," said Rodrigo Catril, a currency strategist at the National Australia Bank.

Fresh strength in the Japanese yen saw the dollar/yen pair slip from the 109 handle on Wednesday; Thursday afternoon Asia time, dollar/yen traded at 108.93, climbing from a previous session low of 108.21. Shares of exporters closed mixed, with Mitsubishi Electric down 0.28 percent, Canon up 0.39 percent, while Sony gained 4.4 percent.

A weaker yen is usually a positive for exporters as it increases their overseas profits when converted into local currency.

"A short-squeeze in the early week abated with no more official talk of intervention yesterday," said Wei Liang Chang from Mizuho Bank. "Markets are also doubting if Japan would intervene in advance of the G7 summit, especially with dollar/yen above 105."

The Australian dollar remained relatively weak, trading at $0.7326, compared to the $0.75 level it touched in the previous week. The Aussie, along with other commodity currencies, received a boost overnight due to higher oil prices.

The New Zealand dollar traded at $0.6822 Thursday evening local time.

In China, the yuan traded against the dollar at 6.5077, after closing at 6.4910 in the previous session. The People's Bank of China set the yuan mid-point at 6.4959, compared to Wednesday's fix at 6.5209.

The central bank allows the yuan spot rate rise or fall a maximum of 2 percent against the dollar relative to the official fixing rate.

Oil prices jumped overnight, with Reuters reporting that data from the U.S. Energy Information Administration showed crude inventories fell 3.4 million barrels last week, against market expectations for an increase in inventory.

During Asian hours on Thursday, however, oil prices were near flat. Global benchmark Brent futures were down 0.08 percent at $47.56 a barrel, after settling up 4.6 percent overnight. U.S. crude were down 0.06 percent to $46.20, after finishing up 3.5 percent on Wednesday.

Stateside, major indexes closed lower, with the Dow Jones industrial average down 1.21 percent, the S&P 500 off by 0.96 percent and the Nasdaq composite losing 1.02 percent.

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