Asia report: Markets up on US data; Yen in focus on BoJ speculation

Asian share markets closed largely higher as a fall in US inflation boosted hopes of a rate cut in September by the Federal Reserve, but Japanese stocks fell sharply on speculation authorities intervened to support the yen.

Tokyo’s Nikkei 225 index closed down 2.46% to 41,236. The yen was volatile overnight, with the down as much as 2.1% to 157.43 against the dollar. It then swung back to 159.26.

The Nikkei newspaper reported that the Bank of Japan conducted rate checks with banks on the euro against the yen on Friday. Suspicions were raised as the currency spike came straight after the US data showing inflation had cooled more than expected.

Hong Kong’s Hang Seng index climbed 2.59% to 18,293 while the Shanghai Composite index was up 0.3% to 2,971 after data showed that China’s exports increased by 8.6% in June, better than the market expectation, although imports fell.

Australia’s S&P/ASX 200 was up 0.88% to 7,959. South Korea’s Kospi slipped 1.2% to 2,856.

Reporting by Frank Prenesti for Sharecast.com