Asian markets mostly down, yen surges
Most Asian markets fell Wednesday, with Tokyo suffering a late sell-off as the yen rose sharply after comments from the central bank chief that the currency would probably not weaken further.
The remarks from Haruhiko Kuroda reversed morning gains in the dollar against the Japanese currency, fuelled by two U. S. reports that gave the Federal Reserve more ammunition to raise interest rates.
With U.S. markets ending largely unchanged, the region had few catalysts to fuel trade, while Greece’s ongoing bailout reform talks continue to keep dealers jittery.
Tokyo ended 0.25 percent lower, dropping 49.94 points to 20,046.36, while Seoul shed 0.62 percent, or 12.71 points, to 2,051.32. However, Sydney added 0.13 percent, or 7.29 points, to 5,478.6.
Hong Kong lost 1.12 percent, or 301.88 points, to close at 26,687.64.
Shanghai closed down 0.15 percent, giving up 7.50 points to 5,106.04 after MSCI delayed including Chinese A shares in its benchmark index, saying it needed to resolve new issues with Chinese regulators.
The market’s rise in the past few days had been prompted partly by expectations it would be added, which would have attracted more funds.
Expectations that the U.S. central bank would start raising interest rates before year-end were amplified on Tuesday after the JOLTS (Job Openings and Labor Turnover Survey) report showed a surge in job vacancies.
Separately, a U.S. small business survey showed businesses were hiring more people and paying them more.
However, Kuroda told a parliamentary committee Wednesday that “a U.S. rate hike would not necessarily lead to a cheaper yen” and said a further decline in the unit was “unlikely.”
While the yen’s sharp decline has been good news for Japanese exporters, it has pushed up the cost of imports and eroded consumers’ purchasing power.
Greece in Focus
“Japanese officials clearly don’t like to see their currency mov- ing in one direction too fast,” Sue Trinh, senior currency strategist at Royal Bank of Canada in Hong Kong, told Bloomberg News.
In Tokyo Wednesday the dollar fell to 122.71 yen from 124.53 yen in morning trade. Earlier this week it was above 125 yen, at a 13-year high. The euro also suffered, buying 139.69 yen from 140.51 in the morning.
In U.S. share trading Tuesday the Dow and S&P 500 ended flat and the Nasdaq fell 0.15 percent.
With Greece facing a deadline at the end of the month for a debt repayment, it desperately needs to reach an agreement that will unlock billions of euros to help avoid a default and possible exit from the eurozone.
As Prime Minister Alexis Tsipras prepares to meet German Chan- cellor Angela Merkel Wednesday for talks, Valdis Dombrovskis, the EU’s vice president for the euro, told reporters that reaching an agreement “within (the) coming days is possible.”
Gold fetched US$1,184.25 compared with US$1,181.70 late Tuesday. In other markets: — Wellington fell 0.99 percent, or 58.24 points, to 5,803.87.
Contact Energy was down 3.12 percent at NZ$5.28 and Spark slipped 1.04 percent to NZ$2.85.
— Manila closed up 0.83 percent, or 60.83 points, at 7,384.27.
Metrobank was 2.33 percent higher at 88 pesos, Universal Robina rose 1.36 percent to 186.50 pesos and GT Capital edged up 0.08 percent to 1,301 pesos.