Asia: Equity markets mixed as Japanese exports disappoint

Asian stocks closed on a mixed note on Wednesday, with Japan advancing but China losing ground.

The Nikkei Stock Average climbed 1.91%, after hopes of further monetary stimulus out of the Bank of Japan were rekindled by data showed Japanese exports grew at their slowest pace in over a year in September.

According to data from the Ministry of Finance in Tokyo, Asia's second largest economy sold 6.4bn yen worth of goods last month, for a year-on-year rise of 0.6% in non-seasonally adjusted terms, well short of analysts’ expectations for 3.8% increase.

Imports were even weaker, falling 11.1% to 6.5bn yen.

As a result, the trade surplus was reduced sharply, dropping 88% to 115m yen.

“Japan is at risk of falling back into recession in the third quarter and today’s trade data did nothing to suggest that this would be avoided,” said Oanda’s senior market analyst Craig Erlam.

“If the country does fall back into recession in the third quarter it will make the job of returning inflation to 2% even more difficult and could pursued the Bank of Japan to consider further stimulus.”

China’s Shanghai Composite slumped 3.06%, its biggest fall in over a month, as investors remained worried over the prospect of a slowdown in the world’s second largest economy and a lower finish on Wall Street, while Hong Kong’s Hang Seng was closed for a bank holiday.

Elsewhere, South Korea’s Kospi gained 0.18%, while Australia’s S&P/ASX 200 edged 0.24% higher, largely thanks to a strong performance among commodities-related stocks.

Fortescue Metals jumped 5.96% to its highest level in four months, while Australia-listed shares of BHP climbed 1% after the mining giant said it would scale back investment plans for its petroleum division.

On the currencies front, the yen declined 0.14% against the dollar, while South Korea’s won gained 0.1% against the greenback and the Malaysian ringgit fell 0.5% against the US currency.

“If the US interest rate expectations continue to get pushed back though, this will impact all currencies pegged to the US dollar,” said FXTM chief market analyst, Jameel Ahmad.