Asian mar­kets hit by Trump fears, weak yen

The Myanmar Times - - International Business -

JA­PANESE stocks soared yes­ter­day as the 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 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.

Tokyo’s Nikkei ended up 1.7 per­cent, with ex­porters ral­ly­ing on the back of the weak­ened yen. “The Fed­eral Re­serve now face the co­nun­drum of ris­ing in­fla­tion ex­pec­ta­tions,” Chris We­ston, chief mar­ket strate­gist in Mel­bourne at IG Ltd, said.

“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.”

Welling­ton gained 0.5pc as a deadly earth­quake in New Zealand’s south is­land boosted con­struc­tion firms on ex­pec­ta­tions of a re­build­ing pro­gram. Shang­hai put on 0.5pc de­spite dis­ap­point­ing re­tail sales and in­dus­trial out­put data for Oc­to­ber.

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

Manila dived 1.5pc and Jakarta was 1.8pc lower, over con­cerns that Mr Trump’s pro­tec­tion­ist rhetoric could see him throw­ing up tar­iffs.

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

“Asian cur­ren­cies con­tinue [to come] un­der al­most univer­sal pres­sure in the af­ter­math of Don­ald Trump’s vic­tory 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 in a state­ment. –

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