Asia traders wary but Tokyo up on weaker yen

Asia traders wary but Tokyo up on weaker yen

Japanese shares got a boost on Tuesday (Apr 17) from a weaker yen but some other key Asian markets drifted lower on geopolitical concerns, with lower iron ore prices dragging on mining stocks in Sydney.

Asia stocks

HONG KONG: Japanese shares got a boost on Tuesday (Apr 18) from a weaker yen but some other key Asian markets drifted lower on geopolitical concerns, with lower iron ore prices dragging on mining stocks in Sydney.

Tensions on the Korean peninsula have been weighing on sentiment, with concerns North Korea may soon build a nuclear-tipped missile that could reach the US.

US Vice President Mike Pence reiterated his country's commitment to the security of Japan on a visit to Tokyo Tuesday, as North Korea vowed to launch missile tests "every week" - ramping up fears over its weapons programme.

In an interview with the BBC, the nuclear-armed North also threatened "all-out war" if the US took any action against it.

"One suspects the concerns in North Korea have further to play out," said IG market strategist Chris Weston, citing worries of further missile testing in the near term.

Hong Kong slumped 1.39 per cent after a two-day holiday, while Shanghai fell 0.8 per cent despite positive Chinese GDP growth data released on Monday.

Sydney also dropped 0.9 per cent in post-holiday trade, with the nervous mood fuelled by weaker iron ore prices according to Ric Spooner, Sydney-based chief analyst at CMC Markets Asia.

Among those hit were Fortescue Metals Group, which gave up 7.5 per cent, BHP Billiton, which fell 1.6 per cent and Rio Tinto, which lost 1.9 per cent.

But Tokyo stocks closed up 0.4 per cent as the yen fell against the dollar, following reported remarks by US Treasury Secretary Steven Mnuchin that US tax reform is still scheduled for 2017 and that a strong dollar is good in the long run.

The dollar rose to ¥108.89 on Tuesday from rates in the mid-¥108 range before news on Mnuchin's remarks.

A weak yen is positive for Japanese exporters as it inflates their repatriated profits.

Seoul was also up, along with Jakarta and Kuala Lumpur.

Spooner hinted that declines in gold and the yen - both considered safe bets in times of turmoil - may be a sign that geopolitical concerns are starting to ease with markets "taking a wait-and-see attitude".

In early European trade, London was down 0.4 per cent, Paris was flat and Frankfurt added 0.4 per cent.

- Key figures around 0900 GMT -

Tokyo - Nikkei 225: UP 0.4 per cent at 18,418.59 (close)

Hong Kong - Hang Seng: DOWN 1.4 per cent at 23,924.54 (close)

Shanghai - Composite: DOWN 0.8 per cent at 3,196.71 (close)

Euro/dollar: UP at US$1.0652 from US$1.0639

Pound/dollar: UP at US$1.2594 from US$1.2539

Dollar/yen: UP at ¥108.89 from ¥108.29

Oil - West Texas Intermediate: DOWN 28 cents at US$52.37 per barrel

Oil - Brent North Sea: DOWN 29 cents at US$55.07 per barrel

New York - Dow: UP 0.9 per cent at 20,636.86 (close)

London - FTSE 100: DOWN 1 per cent at 7,253.16

Source: AFP/ec

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