Asian bourses re­treat, weak yen buoys Tokyo

The Sun (Malaysia) - - SUNBIZ -

HONG KONG: Ja­panese stocks soared yes­ter­day as the US dol­lar reached a four-month high against the yen, but most other Asian mar­kets were hit by wor­ries about the im­pact of Don­ald Trump’s pres­i­dency on global trade.

Eq­ui­ties around the world have seen volatile trad­ing since the ty­coon’s shock elec­tion win, with his pledge of big-spend­ing mea­sures and tax cuts lead­ing to pre­dic­tions of a surge in in­fla­tion and higher bor­row­ing costs.

The prospect of bet­ter and safer re­turns in the US has also led to an ex­o­dus from emerg­ing mar­kets and cur­ren­cies, while the Mex­i­can peso is also strug­gling ow­ing to con­cerns about Trump’s warn­ing he will tear up a key trade deal.

Tokyo’s Nikkei 225 ended up 1.7%, with ex­porters ral­ly­ing on the back of the weak­ened yen. The dol­lar was at ¥107.61, its high­est mark since July.

“The Fed­eral Re­serve now face the co­nun­drum of ris­ing in­fla­tion ex­pec­ta­tions,” Chris We­ston, chief mar­ket strate­gist in Mel­bourne at IG Ltd, said, ac­cord­ing to Bloomberg News.

“What we saw last week was a gen­uine change in the thought process of many money man­agers, with some feel­ing we need to be pre­pared for in­fla­tion, while many oth­ers have been truly scep­ti­cal of the moves and note that while mar­kets are firmly in the ‘hope’ phase there are great ex­e­cu­tion risks.”

Ja­panese in­vestors were also lifted by news the econ­omy grew more than ex­pected in the third quar­ter as ex­ports off­set slack con­sumer spend­ing.

Shang­hai put on 0.5% de­spite data show­ing be­low-fore­cast re­tail sales and in­dus­trial out­put for Oc­to­ber.

How­ever, Hong Kong sank 1.4%, ex­tend­ing a heavy loss on Fri­day, while Seoul and Syd­ney each shed 0.5% and Sin­ga­pore fell 0.9%.

Manila dived 1.5% and Jakarta was 1.8% lower, with deal­ers con­cerned Trump’s pro­tec­tion­ist rhetoric could see him throw­ing up tar­iffs.

The prospect of higher US in­ter­est rates bat­tered higher-yield­ing cur­ren­cies last week and yes­ter­day South Korea’s won was down 0.6%, the Philip­pine peso fell 0.5% and Thai­land’s baht lost 0.1%.

“Asian cur­ren­cies con­tinue (to come) un­der al­most univer­sal pres­sure in the af­ter­math of Don­ald Trump’s vic­tory in the US pres­i­den­tial elec­tions as traders bet that an iso­la­tion­ist and pro­tec­tion­ist pres­i­dency could harm the re­gion,” Greg McKenna, chief mar­ket strate­gist at CFD and FX provider Ax­iTrader, said.

The dol­lar was also at record highs against the Mex­i­can peso. – AFP

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