Asia Markets: Asian markets mostly higher, but Nikkei abandons rally on yen strength
Asian stocks were looking to end the week broadly higher, building on the global rebound that began a day earlier, but early strength in Japan and South Korea cooled by late morning, with fresh weakness in the U.S. dollar hurting their export-reliant stock markets.
The Nikkei NIK, +0.20% closed up 0.2% and briefly fell into negative territory after rising as much as 1.8% in morning trading. The gains evaporated as the yen strengthened, especially against the sagging U.S. dollar. The index ended a nine-week winning streak, the longest since the start of 2013.
The dollar rebounded from session lows by early afternoon, with the WSJ Dollar Index BUXX, -0.22% off 0.2% after hitting its worst level of the week. The greenback was recently down 0.5% at ¥112.46 from ¥113.10 in early Asian trading.
Michiyoshi Kato, senior vice president of foreign-exchange sales at Mizuho, attributed the move to renewed concerns about possible ties between President Donald Trump’s campaign and Russia. He said market participants might also be closing their short-yen positions ahead of the Thanksgiving holiday in the U.S.
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Exporters such as Sony SNE, +1.90% 6758, +0.73% and Honda 7267, +0.27% , which were up more than 2% earlier, ended less than 1% higher, while Toyota TM, +0.57% 7203, -0.65% fell 0.7%.
South Korea also pulled back from initial advances of at least 1%, with the Kospi SEU, -0.03% up just 0.2% as Samsung’s 005930, +0.07% early strength faded. The Korean won has been at its strongest level in 13 months against the dollar.
Benchmarks in Taiwan Y9999, +0.72% and Singapore STI, +1.20% maintained their gains, the latter rebounding after reporting stronger exports.
Investors are looking to buy on the dips, so “everyone has jumped into the market this morning” following the global declines earlier in the week, said Margaret Yang, an analyst at CMC Markets in Singapore. She noted interest in industry leaders such as Tencent 0700, +2.86% . The Chinese internet heavyweight rose 3.2% in Hong Kong to hit fresh record highs.
The Sensex 1, +1.02% rose 1.1% after Moody’s moved India’s credit rating higher into investment-grade territory — the rating firm’s first upgrade of the country since January 2004. The rupee rallied on the news, with the dollar down 0.7%, reversing its November rebound against the Indian currency.
Chinese stocks continued to lag behind amid worries about the economy. Recent soft data spooked investors, resulting in the People’s Bank of China injecting more money into the financial system this week than at any time since the typical jump before the Lunar New Year holiday period.
David Millhouse, head of China research and strategy at Forsyth Barr, said he believes there will be more volatility in the year-end. “It’s been a strong year” for stocks, notably in Asia, “and with a few macro and geopolitical headwinds popping up, it’s certainly possible some people move to lock in profits.”
Oil prices were mixed in Asian trading after hitting fresh two-week lows overnight. The U.S. benchmark was up 0.3%, while the global Brent standard was off 0.3%; the latter has fared worse than West Texas Intermediate in recent days.
Stocks in Australia, whose largest trading partner is China, have also been hit by the uncertainty. Despite modest gains Friday, the S&P/ASX 200 XJO, +0.23% fell 1.2% this week, the biggest drop since early June.
S&P 500 futures were recently down 0.1% after the index logged its biggest gain in two months on Thursday.
— Kosaku Narioka contributed to this article.