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Asia markets close higher; Nikkei up 1.1 pct after wavering

Asia markets advanced on Thursday, with Japanese shares closing higher after wavering in the morning session as stocks came under pressure from a slightly stronger yen.

The benchmark Nikkei 225 switched between gains and losses throughout the day before closing 171.78 points, or 1.07 percent, higher at 16,254.89. The Topix added 11.01 points, or 0.87 percent, at 1,282.99.

The Japanese yen was stronger against the dollar in the morning, trading as high as 100.84, before pulling back to a session low of 101.66. As of 2:47 p.m. HK/SIN, the currency pair traded at 101.54.

The yen had strengthened in recent days after some investors were left disappointed by details of Prime Minister Shinzo Abe's fiscal stimulus plan, which followed on the heels of a lower-than-expected monetary policy stimulus announced by the Bank of Japan.

Australia's benchmark ASX 200 closed up 10.08 points, or 0.18 percent, at 5,475.80, with the energy sub-index rallying 2 percent following the overnight rebound in oil prices.

In South Korea, the Kospi gained 5.24 points, or 0.26 percent, to 2,000.03. In Hong Kong, the Hang Seng index was up 0.51 percent in afternoon trade.

Chinese mainland markets were mostly up, with the Shanghai composite adding 4.19 points, or 0.14 percent, at 2,982.65, and the Shenzhen composite higher by 14.09 points, or 0.72 percent, at 1,948.91.

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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Oil prices rebounded more than 3 percent overnight, following a larger-than-expected drawdown on the U.S. gasoline stockpile.

Gasoline inventory fell by 3.3 million barrels versus a forecast for a 200,000-barrel drop, Reuters reported. The drawdown appeared to have offset data from the Energy Information Administration, which Reuters reported showed a 1.4 million barrels uptick in U.S. crude inventories last week.

During Asian hours, U.S. crude traded up 0.24 percent at $40.93 a barrel as of 2:39 p.m. HK/SIN, while global benchmark Brent was near flat at $43.13.

"Oil has once again established itself as the central thematic behind the world's financial markets and the fact we saw such a powerful reversal at the trend low, despite dollar strength, has driven a slight uplift in sentiment," said Chris Weston, chief market strategist at brokerage IG.

Australian banks were in focus during the session, with the so-called Big Four finishing mixed. Shares of ANZ were 0.12 percent lower, Commonwealth Bank of Australia closed down 0.49 percent, while Westpac and the National Australia Bank added 0.17 and 0.23 percent respectively.

Reuters reported that Australian Prime Minister Malcolm Turnbull said the government would bring the biggest banks in the country before the parliament's economics committee each year to provide a full account of their affairs.

On Wednesday Turnbull criticized the country's big banks for refusing to fully pass on the Reserve Bank of Australia's (RBA) 25 basis-point rate cut to customers, Reuters reported.

Analysts have previously pointed out that a failure by banks to pass on the RBA's rate cut in full could reflect the ongoing pressure the companies faced to hold more capital and the competition to offer more attractive term deposits.

Akio Kon | Bloomberg | Getty Images

In India, the stock market reacted positively to the passing of a Goods & Services Tax (GST) bill in the upper house of parliament, after languishing in a political deadlock for months.

The Nifty 50 index was up 0.24 percent in afternoon trade, while the Sensex added 0.27 percent. The Indian rupee traded slightly weaker against the dollar at 66.945, compared to levels below 66.800 earlier in the week.

Analysts mostly welcomed the news, with Goldman Sachs saying in a note the passage of the GST constitutional amendment bill in the Upper House was "a major development in India's indirect tax reforms."

"We expect limited macro impact of GST implementation in the short run, however it does provide a sentiment boost," the Goldman analysts said. "Looking at progress of key reforms ... two out of the four major reforms we were expecting for 2016 have now been completed ...[which] bodes well for the government's efforts on implementing reforms."

In Japan, Reuters reported that Bank of Japan (BOJ) deputy governor, Kikuo Iwata, said a comprehensive review of the central bank's policies, due in September, would focus on the monetary transmission mechanism and obstacles to its stimulus plan succeeding.

In the Japanese government bond (JGB) market, the yield on the 10-year JGB was at negative 0.076 percent after climbing to negative 0.058 percent earlier. The yield had risen from levels near negative 0.240 percent from last week, after some investors were likely left disappointed by the BOJ's decision to not expand their JGB purchases.

Bond prices move inversely to yields.

In company news, shares of Rio Tinto closed down 1.62 percent, erasing all of their near-1.8 percent gains from early trade, as investors digested poor first-half earnings reported on Wednesday after market close.

The miner said its first half underlying earnings dropped 47 percent to $1.56 billion. But Rio appeared to have surprised investors by announcing an interim dividend of 45 U.S. cents per share.

Hong Kong-listed shares of HSBC traded up 2.13 percent in the afternoon, while Standard Chartered climbed 2.76 percent, after both banks reported earnings on Wednesday.

HSBC, one of Britain's largest lenders, reported a near-29 percent on-year drop in first half pre-tax profits, while Standard Chartered posted a 19.78 percent on-year drop in its first-half underlying operating income, which came in at $6.81 billion.

Japanese automaker Toyota reported earnings after the market closed on Thursday. Fiscal first-quarter profits fell by 15 percent to 642.23 billion yen ($6.33 billion), according to the car maker, with a stronger yen weighing on profits. For the full fiscal year 2017, Toyota expects profits to fall by 43.9 percent on-year to 1.6 trillion yen.

Toyota shares closed up 1.83 percent.

Stateside, U.S. stocks closed slightly higher, with the Dow Jones industrial average snapping a seven-day slide to close up 41.23 points, or 0.23 percent, at 18,355.

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