HONG KONG, (APP/AFP) – Japanese stocks led a broad rally
on Asian markets Thursday, posting a fourth straight gain as investors took heart from another record close on Wall Street, while the pound rose ahead of a key central bank meeting.
The Nikkei index has now wiped out all the losses sustained after
Britain’s shock vote to leave the EU, while the yen sank further as traders await details on promised government economic stimulus.
The gains extend a global advance this week fuelled by talk of
growth-boosting measures from central banks and governments around the world.
Tokyo has been the stand-out performer with Prime Minister Shinzo Abe
expected to unveil a new round of spending as the world’s number three economy limps along.
The Nikkei 225 ended one percent higher, helped by another fall in
the value of the yen, which has been buffeted by the prospect that more stimulus cash will be flooding financial markets.
The dollar bought 105.50 yen in the afternoon, up from 104.52 yen in
New York Wednesday. Gaming giant Nintendo ended another 16 percent higher thanks to the huge success of its Pokemon Go game. The firm has now soared more than 60 percent since last Thursday’s close.
However, analysts say there is still some lingering nervousness on
trading floors.
“Investors remain very skittish and it won’t take much to rattle
sentiment,” James Audiss, a senior investment adviser at Shaw and Partners in Sydney, told Bloomberg News.
“We’re watching the yen-dollar rate really closely.”
The pound rose to $1.3226 from $1.3144 in New York, hours before a
Bank of England policy meeting many expect will see a cut in interest rates from an already record low 0.5 percent to 0.25 percent, or even zero, as it tries to plot a course after the Brexit vote.
It is also well up from the levels below $1.28 touched last week,
thanks to the surprisingly quick change of leadership of the ruling Conservative party, with Theresa May taking over from David Cameron as prime minister.
The news provided traders with some much-needed stability following
Cameron’s resignation immediately after losing the June 23 referendum.
– China woes –
==============
Hong Kong rose 1.1 percent but Shanghai ended down 0.2 percent, a day
after China unveiled data showing imports and exports both fell last month,
reinforcing worries about the slowing economy.
The figures bode ill for Friday’s release of second-quarter economic
growth figures, which is expected to come in at a seven-year low of 6.6 percent, according to a survey by AFP.
China’s yuan dropped to its lowest in nearly six years on the back of
the trade data. The unit was at 6.6878 against the dollar Thursday — just off levels last reached in November 2010.
“All eyes are on China’s economic data for the second quarter — if
the numbers turn out to be weak, the yuan may depreciate beyond 6.7 per dollar,” Andy Ji, a foreign-exchange strategist at Commonwealth Bank of Australia, said.
Elsewhere, Sydney edged up 0.4 percent and Seoul added 0.2 percent,
while Wellington and Taipei also posted gains.
On Wall Street, the Dow and S&P 500 posted new records after a
Federal Reserve report described the US economy as still modestly growing with signs of a slowdown in consumer spending.
Oil prices rebounded following a 4.5 percent slump Wednesday caused
by a smaller-than-forecast drop in US inventories.
In afternoon Asian trade West Texas Intermediate was up 0.9 percent
at $45.17 and Brent added 0.7 percent to $46.60.
In early European trade London added 0.9 percent, Paris put on one
percent and Frankfurt surged 1.4 percent.
– Key figures around 0800 GMT –
===============================
Tokyo – Nikkei 225: UP 1.0 percent at 16,385.89 (close)
Hong Kong – Hang Seng: UP 1.1 percent at 21,561.06 (close)
Shanghai – Composite: DOWN 0.2 percent at 3,054.02 (close)
London – FTSE 100: UP 0.9 percent at 6,727.12
Dollar/yen: UP at 105.50 yen from 104.52 yen Wednesday
Pound/dollar: UP at $1.3226 from $1.3144
Euro/dollar: UP at $1.1116 from $1.1089
New York – DOW: UP 0.1 percent at 18,372.12 (close)