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Asia markets mixed as dollar takes a breather

Asian markets traded mixed on Monday as dollar strength took a breather and oil prices surged.

Helping to improve sentiment around Asia, the U.S. dollar index, which measures the greenback against a basked of currencies, eased off a multi-year high of 101.48 touched last week. The greenback was wavering at 101.09 against a basket of currencies as of 3:40 pm HK/SIN.

"The dollar rally is probably running out of steam as the market seems to have fully priced-in the 'Trump effect' and an impending December rate hike," said Margaret Yang, market analyst at CMC Markets, in a note on Monday.

Crude futures gained upward momentum during Asian trade, with U.S. West Texas Intermediate (WTI) crude up 1.01 percent at $46.15 a barrel, while Brent added 0.85 percent to $47.26. Both crude futures had risen nearly 5 percent last week.

Japan's Nikkei 225 closed up 0.77 percent, or 138.61 points, at 18,106.02, as the yen declines stalled.

Chinese shares were in positive territory, with the Shanghai composite closing up 0.79 percent, or 25.35 points, at 3,218.2, and the Shenzhen composite finishing up 0.363 percent, or 7.67 points, at 2,118.94. Hong Kong's Hang Seng was up 0.21 percent, after initially opening in negative territory.

Sanjiang Shopping Club saw its shares surge 9.99 percent to 13.98 yuan, after hitting the maximum allowed move of 10 percent, after Alibaba Group announced it would invest 2.1 billion yuan ($304.91 million) in the supermarket chain.

Australia's benchmark ASX 200 closed down 0.15 percent, or 8.079 points, at 5,351.34, but losses were offset by strengths in its energy sub-index, which was up 1.69 percent, and its all ordinaries gold sub-index, which was up 2.02 percent.

South Korea's benchmark Kospi finished down 0.43 percent, or 8.53 points, at 1,966.05 after prosecutors said on Sunday that they believed President Park Geun-hye was an accomplice in a corruption scandal. This will likely spur more public protests for President Park to step down or be impeached, Reuters reported.

In economic news, Japan October trade data was released early Monday morning, showing that exports fell for the 13th straight month amid weak foreign demand, while imports fell 16.5 percent, compared with the Reuters consensus estimate for a 16.3 percent decline.

South Korea announced preliminary estimates for trade in November, showing exports in the first 20 days of November fell 0.2 percent on-year in dollar terms, while imports fell 3.1 percent.

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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Investors also focused on bond markets, with U.S. bond yields near their highest this year.

During Asian trade, the U.S. benchmark 10-year Treasury yield was up at 2.3208 percent, while 30-year Treasury bond yield was at 3.0069 percent.

"The financial markets still have the bond market right at the epi-centre of almost everything right now and rightly so, the moves have been incredible," Chris Weston, chief market strategist at IG, said in a note on Monday.

U.S. bond yields have climbed in the wake of Donald Trump's surprise election win, amid expectations of higher inflation.

The People's Bank of China set Monday's yuan mid-point fix at 6.8985 yuan per dollar, compared with the last close at 6.888. The dollar/yuan was trading at 6.895 as of 3:46 pm HK/SIN. That was its weakest since weakest since at least January 2009, during the global financial crisis.

"We are approaching the psychological 7 dollar/yuan level and predictable rumblings from Chinese policy makers are making the rounds, suggesting that the 7.00 level could be the 'next line in the sand,'" said Stephen Innes, senior trade at Oanda, in a note on Monday.

The yen was wavering against the dollar near 111 levels, trading at 110.89 as of 3:46 pm HK/SIN.

"U.S. fixed income [is] ratcheting higher while the Bank of Japan maintains its de facto zero percent peg in 10-year Japanese Government Bonds (JGBs). This underlying divergence will continue to support dollar/yen higher," Innes added.

On the corporate news front, Fullerton Health announced it would defer its plans for an initial public offering (IPO) this year. The Singapore healthcare provider said this was because of the current market uncertainty, and that it would "re-assess equity capital market options in 2017."

Stateside, U.S. markets closed slightly lower on Friday, as investors digested Federal Reserve officials' comments on monetary policy.

The Dow Jones industrial average fell 0.19 percent to 18,867.93, the S&P 500 slipped 0.24 percent to close at 2,181.9 and the Nasdaq composite fell 0.23 percent to 5,321.51.

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