Asia markets mostly step back but dollar maintains gains

Asia markets mostly step back but dollar maintains gains

People are reflected on an electronic stock indicator of a securities firm in Tokyo. (Photo: AP/Shizuo Kambayashi)

HONG KONG: Asian investors eased off the pedal on Wednesday (Sep 12) after recent gains but the dollar held up against the yen as North Korea kept itself in the mix by warning it would strengthen its nuclear programme in response to fresh UN sanctions.

While Tokyo was able to kick on thanks to a further weakening of the yen, most regional traders were unwilling to track the record close on Wall Street, and Apple-linked firms were mixed after the firm unveiled its new phone.

The latest gains have been fuelled by relief that Hurricane Irma did not hammer Florida as badly as feared and that the North Korea crisis had eased somewhat after its recent provocative nuclear and missile tests.

However, Pyongyang attracted renewed attention when it vowed Wednesday to accelerate its weapons drive after "evil" Security Council sanctions.

US President Donald Trump had earlier warned of more measures against Kim Jong-Un's regime, while the European Union said it would push ahead with further moves.

In equities trade Tokyo ended 0.5 per cent higher as exporters benefited from the weaker yen. The greenback broke back above ¥110 on Tuesday after last week's sell-off saw it tumble to the 10-month lows around ¥107.30.

Shanghai added 0.1 per cent but Hong Kong slipped 0.3 per cent, while Sydney eased slightly and Seoul and Singapore lost 0.2 per cent each. Wellington and Taipei were also lower.

In other currency trading the pound extended gains after hitting a one-year high against the dollar on the back of a strong British inflation reading, while it was also given support by the return of optimism to markets.

London, which fell on the strong pound Tuesday, opened 0.3 per cent lower and Paris shed 0.1 per cent while Frankfurt was 0.2 per cent off.


OANDA head of Asia-Pacific trading Stephen Innes issued a word of caution after the recent global volatility.

"Ultimately this buoyant risk sentiment should be cheered, but forex traders remain in the Nervous Nellie camp waiting for the next chaotic patch given the evolving narratives," he warned.

"A word of caution to those enjoying this unexpected sea of tranquillity: the next few weeks and months come with significant risk."

The release later this week of US inflation figures will be closely followed as the Federal Reserve ponders another interest rate rise and the winding in of its stimulus programme.

Analysts said policymakers could take a little more time to make a move in light of Hurricane Irma in Florida and last month's Harvey in Texas, which could skew the data the Fed relies on to make its decision.

But Janu Chan, a senior economist at St. George Bank in Sydney, told Bloomberg News: "Our view has been for the US dollar to continue its downward trend that has occurred since January.

"The Fed is no longer the only central bank tightening. Markets are all looking to other central banks. European Central Bank tapering is the next theme that markets want to latch onto."

Apple suppliers in the region were mixed after the US tech titan unveiled its long-awaited iPhone X and two other models. Apple ended lower in New York trade as investors shrugged.

In Japan component-maker Nidec jumped 3.5 per cent and Sharp gained 1.2 per cent. Seoul-listed LG Innotek, which supplies 3D sensing modules, fell 1.8 per cent while OLED material provider Innox Advanced Materials slipped 0.9 percent as investors were disappointed at delays in rolling out the iPhone X.

In Taipei, TSMC retreated 0.5 per cent and Hon Hai gave up 1.3 per cent.

- Key figures around 0820 GMT -

Tokyo - Nikkei 225: UP 0.5 per cent at 19,865.82 (close)

Hong Kong - Hang Seng: DOWN 0.3 per cent at 27,894.08 (close)

Shanghai - Composite: UP 0.1 per cent at 3,384.15 (close)

London - FTSE 100: DOWN 0.3 per cent at 7,380.48

Euro/dollar: UP at US$1.1980 from US$1.1964 at 2130 GMT

Dollar/yen: DOWN at ¥110.12 from ¥110.18

Pound/dollar: UP at US$1.3310 from US$1.3280

Oil - West Texas Intermediate: FLAT at US$48.23 per barrel

Oil - Brent North Sea: DOWN five cents at US$54.22

New York - DOW: UP 0.3 per cent at 22,118.86 (close)

Source: AFP/ec