Asia Markets

Asia markets close mixed after Japanese shares give up morning gains

Key Points
  • Asian shares closed mixed
  • Japanese shares fell after touching multi-year peaks during morning trade
  • The Reserve Bank of New Zealand kept rates unchanged
  • China inflation data for October topped expectations

Asian stocks closed mixed on Thursday after Japanese stocks erased all the gains they made during morning trade. Investors in the region also digested the release of Chinese inflation data and kept an eye on President Donald Trump's stop in Beijing.

Markets on the move 

Japanese markets reversed all gains made in the morning session as the yen strengthened against the dollar. The Nikkei 225, which had climbed some 2 percent to trade above the 23,000 mark in the morning, edged down 0.2 percent to close at 22,868.71. The broader Topix index finished the session 0.25 percent lower after touching levels not seen since 1991 earlier in the day.

Across the Korean Strait, the Kospi shed 0.07 percent to close at 2,550.57.

Down Under, the S&P/ASX 200 advanced 0.55 percent to close at 6,049.43. The materials and information technology sub-indexes climbed, but a number of energy-related names pared some gains made earlier in the week.

Hong Kong's rose 0.83 percent by 3:11 p.m. HK/SIN. Mainland markets, meanwhile, closed moderately higher: The climbed 0.36 percent to end at 3,427.79 and the Shenzhen Composite advanced 0.74 percent to close at 2,028.69.

MSCI's broad index of shares in Asia Pacific excluding Japan was up 0.31 percent at 3:22 p.m. HK/SIN.

U.S. stocks closed higher on Wednesday even though banks finished the session lower. The Dow Jones industrial average edged up 0.03 percent, or 6.13 points, to close at 23,563.36.

The lead up

The Reserve Bank of New Zealand kept rates unchanged at 1.75 percent on Thursday as was expected, but its accompanying comments were seen as hawkish by markets. The held onto most gains made after the announcement to trade at $0.6961 at 3:13 p.m. HK/SIN. The currency had spiked as high as $0.6973 in the Wednesday session, compared to levels around the $0.692 handle seen before the announcement.

President Donald Trump's tour of Asia also remained in the spotlight. Trump addressed the U.S.-China trade deficit during a Thursday speech in Beijing and said he would work on fixing "unfair trade practices."

Meanwhile, China October consumer prices rose 1.9 percent compared to one year ago, a touch above the 1.8 percent rise forecast in a Reuters poll. Producer prices also topped expectations, increasing 6.9 percent on year compared to the 6.6 percent forecast.

Stateside, off-year elections saw Democrats score victories in Virginia and New Jersey in Tuesday polls. While "there was some chatter about yesterday's U.S. governor elections ... and what they could mean or signal about the viability of some of the U.S. administration's reforms," that had little impact on the markets, Martin Whetton, a strategist at ANZ, said in a note.

On the matter of tax reform, U.S. House of Representatives Speaker Paul Ryan indicated there would still be growth even with a phased implementation of corporate tax cuts, Reuters said. That followed a Washington Post report on Tuesday that said a one-year delay in the implementation of tax reform measures was being considered.

The dollar eased on Thursday after slipping in the last session. Against the Japanese yen, the greenback traded at 113.59 at 3:12 p.m. HK/SIN after climbing as high as 114.06 earlier in the day. The dollar index, which tracks the U.S. currency against a basket of six currencies, stood at 94.731.

Commenting on moves in the foreign exchange markets in response to U.S. political developments, Stephen Innes, APAC head of trading at OANDA, said markets were struggling to find a reliable argument to stick to.

"[M]uddling through the political bluster is more of a distraction than a guide," he said in a morning note.

Corporate news 

Bank of Tokyo-Mitsubishi UFJ intends to purchase a stake worth around 40 percent in Indonesia's Bank Danamon, Nikkei reported. A spokesman from MUFG said the report was not based on any announcements made by the bank. Mitsubishi UFJ Financial Group stock closed down 0.45 percent and shares of Bank Danamon jumped 15.98 percent by 3:14 p.m. HK/SIN. A spokesman from MUFG said the report was not based on any announcements made by the bank.

Shares of Japan Display tumbled 10.37 percent by the end of the session. The company on Wednesday posted a loss of 36.6 billion yen ($321 million) for the quarter ending September 30. That was larger than the loss of 4.9 billion yen it reported for the same period one year ago.

Meanwhile, China's Tencent has taken a 12 percent stake in U.S. social media company Snap. The news came after Snap missed third-quarter revenue expectations on Tuesday. Tencent shares advanced 0.88 percent by 3:15 p.m. HK/SIN. Other Hong Kong tech shares also rose: China Literature was last up 2.73 percent, extending gains made after the stock closed up nearly 90 percent on its Wednesday debut.

Chinese internet search company Sogou was also in focus after it priced its American depository shares at $13 to put the size of its initial public offering at $585 million, Reuters reported. Sogou is set to trade on the New York Stock Exchange on Thursday U.S. time under the ticker "SOGO."