Asia: Equities mixed as Nikkei flirts with 20,000 threshold

Asian stocks closed on a mixed note on Thursday, with Japanese equities extending gains driven by the weakening yen.

The Nikkei Stock Average climbed 0.49%, closing to 19,944.41 and extending its gains for the year to date to 14%, making it the second best performing market in Asia.

Japan's main benchmark last closed above the 20,000 level on 20 August but has jumped 18% since hitting a fresh low on 29 September, driven by solid third quarter earnings and by the prospect of more stock buybacks.

In the period between 1 October and 15 November, some 575bn yen (£3.11bn) worth of buybacks were announced compared with an average of 558bn yen in the corresponding period over the last five years.

The Nikkei has also been boosted by a decline in the yen, which has seen the Japanese currency lose 3.2% against the dollar over the last three months amid expectations that the US Federal Reserve will hike interest rates next month.

On Thursday, the yen gained 0.12% against the dollar, after an upbeat US jobs report on Wednesday had sent the greenback higher.

“The dollar is currently finding support above the 122.20 area after last week’s bearish daily reversal, and as long as we stay above here we can’t rule out a return to the 124.00 area, as well as the possibility of a move through to the August highs at 125.30,” said CMC Markets’ chief market analyst Michael Hewson.

“Only a move below the 121.80 area would delay the prospect of this scenario unfolding.”

Elsewhere, the Shanghai Composite Index declined 0.34%, while Hong Kong’s Hang Seng Index was flat and South Korea’s Kospi rose 1.06%.

Meanwhile, Australia’s S&P/ASX 200 advanced 0.33%, offsetting a sharp decline in the materials sector, which fell 1.3% on the day, extending its weekly losses to 4.6% due to the slump in copper and nickel prices.

Among individual stocks, BHP Billiton tumbled 3.71% after a UN reports showed an avalanche of mud caused by a dam failure in Brazil earlier this month contained “high levels of toxic heavy metals and other toxic chemicals.”

The dam was operated as a joint venture by BHP and mining giants Vale SA.