Japanese stocks up, miners drag on Australia
SINGAPORE: Asian shares rose on Wednesday, with Japan's Nikkei maintaining a fourth quarter rally as investors hunted bargains in one of the developed world's cheapest markets, but Australia's main index lagged as bad weather hit shares in mining heavyweights.
The dollar was steady after a sharp reversal against the euro in an erratic previous session, while the Swiss franc held near a record high against both the dollar and the euro as investors sought refuge from euro zone debt.
A weaker dollar had lifted demand for commodities priced in the U.S. currency, and London Metal Exchange copper rose to a record $9,437.50 a tonne on Wednesday, boosted also by a stoppage at a key port in major producer Chile.
Copper's strength failed to support mining giants Rio Tinto (RIO.AX) and BHP Billiton (BHP.AX), which both fell more than 1 percent as heavy rain disrupted mining and shipping operations. China's Christmas Day interest rate rise also prompted investors to fret about weaker demand for industrial metals, but analysts said the impact was likely to be shortlived.
"The Chinese rate rise was key but it appears it is more about curbing inflation and demand for base metals will not fall sharply," said Ben Potter, research analyst at IG Markets.
Tokyo's Nikkei (.N225) rose 0.5 percent, despite the stronger yen that hurt some big exporters such as Canon Inc (7751.T). The Nikkei has risen nearly 10 percent in the final quarter of 2010, although it is down 2 percent for the year.
With shares trading around 1.1 times book value, Japan remains one of the cheapest developed markets after debthit Ireland, Greece and Italy.
"There is no solid reason to sell Japanese shares actively as the outlook for the market is still bright," said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management. MSCI's broadest index of Asia Pacific shares outside Japan (.MIAPJ0000PUS) was also up 0.5 percent and has risen more than 13 percent this year. -Reuters