Asian mar­kets strug­gle but weak yen lifts Tokyo stocks

The Myanmar Times - - International Business -

JA­PANESE stocks ex­tended their re­cent rally yes­ter­day as the dol­lar con­sol­i­dated gains against the yen, with in­vestors bet­ting on a US in­ter­est rate rise next month. How­ever, other mar­kets con­tin­ued to strug­gle due to un­cer­tainty over the im­pact of a Don­ald Trump pres­i­dency in Jan­uary.

The green­back has soared to near six-month highs against the yen since Mr Trump’s elec­tion win on a plat­form of huge in­fra­struc­ture spend­ing and tax cuts. Ex­perts say this will fan in­fla­tion and force the Fed­eral Re­serve to raise rates.

The dol­lar’s rise has been a boon for Ja­pan’s ex­porters as it makes their goods cheaper over­seas and boosts repa­tri­ated prof­its.

The dol­lar hit 111.12 yen at one point in Ja­pan, lev­els not seen since the end of May, while the Nikkei stock in­dex climbed 0.8 per­cent to its high­est level since Jan­uary.

“The trend for yen weak­ness will con­tinue amid a very vi­o­lent and volatile mar­ket next year,” said Shusuke Ya­mada, chief Ja­pan for­eign ex­change and eq­uity strate­gist at Bank of Amer­ica Mer­rill Lynch in Tokyo.

How­ever, Chris We­ston, chief mar­ket strate­gist in Mel­bourne at IG Ltd, told Bloomberg News, “We have seen some mon­ster moves over the past two weeks on US Fed­eral Re­serve ex­pec­ta­tions, and I think that can’t go on for much longer.”

Mr We­ston added, “I wouldn’t be sur­prised to see a lit­tle bit of pause as in­vestors take a break to catch their breath, and th­ese Asian mar­kets may take a lit­tle breather as well and see some con­sol­i­da­tion, whether it’s been fall­ing or ral­ly­ing.”

Most re­gional mar­kets re­treated on con­cerns that the Fed would raise rates faster next year than pre­vi­ously thought. Syd­ney eased 0.2pc and Seoul was 0.4pc off. Sin­ga­pore dipped 0.4pc and Welling­ton gave up 0.1pc.

Among emerg­ing-mar­ket bourses, Manila lost 1.6pc and Jakarta fell 0.4pc, hit by for­eign cash out­flows as deal­ers head to the United States look­ing for bet­ter and safer re­turns.

But Hong Kong added 0.06pc and Shang­hai ended 0.8pc higher.

Oil prices built on Novem­ber 18 gains, with both main con­tracts ris­ing more than 1pc, af­ter Rus­sia and Iran both ex­pressed op­ti­mism a deal can be agreed be­tween OPEC and other ma­jor pro­duc­ers on cut­ting out­put. –

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