Asia report: Japan drags mixed region down

Asian markets started the week mixed, with Japanese shares dragging while others shrugged off better-than-expected US jobs data out on Friday.

In Japan, the Nikkei 225 reversed its early gains, closing down 0.25% at 16,123.37.

Fresh data released as part of the Bank of Japan’s Tankan survey for March on Monday suggested the central bank’s adoption of negative interest rates in January was doing little to convince businesses that inflation was on its way.

The survey showed that companies expected prices to increase by 0.8% on average in the next year, lower than the previous 1% expectation. Over the next three year, expectations are for 1.1% price rises, down from 1.3% expectations.

Investors were once again clambering for the safe haven yen, which strengthened and stayed at the JPY 111 mark against the greenback for much of the day. It was last 0.08% closer to the USD, at JPY 111.60 per dollar.

A strong yen saw Japan’s large exporters close lower once again, with Honda off by 1.1%, Toyota closing down 2.53% and Nissan losing 2.78% by close in Tokyo.

South Korea’s Kospi closed up 0.27% at 1,97.97. Markets in China, Hong Kong and Taiwan were closed for the Qingming Festival, or Tomb-Sweeping Day.

Figures released after Asia closed for the week on Friday, which showed US nonfarm payrolls as increasing by 215,000 in March - against a forecast 205,000 - appeared to have a marginal effect on Asian markets.

"This month's job data, together with strong job growth over the last few months, will help to maintain investors' confidence in the U.S. economy and reduce worries of a recession," noted CMC Markets Singapore market analyst Margaret Yang.

Oil prices sank during Asian trading, though they were mixed after the trading session ended. Brent crude was last up 0.34% at $38.79 per barrel, while West Texas Intermediate lost 0.11% to $36.75.

It appeared prices were still feeling the effects of Saudi Arabia’s deputy Crown Prince’s comments last week. Mohammed bin Salman was reported as saying Saudi Arabia would not join in a freeze if Iran and other OPEC and non-OPEC producers did not sign up also.

Iran’s minister of petroleum Bijan Zanganeh said at the weekend that the country was now exporting more than two million barrels of oil and gas condensates per day.

“There has not been one proposal yet that Iran has remotely entertained,” noted IG market strategist Evan Lucas.

Down under, the S&P/ASX 200 closed almost flat at 4,995.30, with the financials sector dragging Sydney down once again. The big four Australasian banks - Australia and New Zealand Banking Group, Commonwealth Bank of Australia, National Australia Bank and Westpac - were mixed, finishing between -0.1% and 0.55%.

Energy was also down in Australia, with Woodside Petroleum losing 2.69% and Santos finishing down 4.34%.

New Zealand shares resumed their recent rally, with the country’s record low interest rates pushing investors to go yield-hunting in a week of little scheduled corporate news. The S&P/NZX 50 gained 0.5% to close at 6,743.60.

Reuters data showed the dividend yield across the benchmark as sitting at 4.78%, while the country’s banks were only offering 3.38% for term deposits, pushing cash towards the markets.

The Kiwi slipped back from the greenback during the day, and was last trading 0.6% weaker at NZD 1.4569. Its trans-Tasman cousin also weakened 0.69% on Monday, with one US dollar being last worth AUD 1.3111.