Asia report: Japan surges as earthquakes batter the Kiwi

Markets in Asia finished mixed on Monday, with Japan leading the region as the yen weakened and Tokyo released some positive economic data, while a series of deadly earthquakes saw the New Zealand dollar face a volatile session.

The Nikkei 225 was up 1.71% to 17,672.62, with the yen remaining weaker against the greenback - it was last 1.21% weaker at JPY 107.94 per $1.

During the session, Japan’s third quarter gross domestic product numbers were released, showing the domestic economy grew 2.2% year-on-year.

That was more than double the Reuters-polled estimate for a 0.9% uptick.

On the mainland, the Shanghai Composite was up 0.44% at 3.210.10, and the Shenzhen Composite added 0.3% at 2,144.30.

There was mixed economic data out of Beijing during the session, with fixed asset investment rising ahead of market expectations in the year-to-date to October, by 8.3%.

Industrial output and retail sales both missed forecasts for October, at 6.1% and 10% respectively, compared to Reuters-polled estimates for 6.2% and 10.7% growth.

Chinese conglomerate LeEco broke its losing streak on Monday, settling up 1.77%.

The technology firm had faced pressure in recent weeks, after its founder wrote to staff admitting the wide-reaching operation was facing cash shortages and funding problems.

Hong Kong’s Hang Seng Index was down 1.37% at 22222.22, while South Korea’s Kospi finished down 0.51% at 1,974.40, as the country’s presidential crisis grew.

Hundreds of thousands of protestors took to the streets over the weekend, calling for president Park Geun-hye to step down after she admitted to allowing private individuals to influence her.

The markets were still focused on a different president, however, with analysts pointing to evidence investors were taking a gentle approach to reacting to his taking over of the reins.

“The market will remain alert to any news on President-elect Trump's policies and possible appointments,” noted National Australia Bank’s co-head of FX strategy Ray Attrill.

“In this regard we may be due for something of a reality check.”

Oil prices were lower towards the end of Asian trading hours, with Brent crude last down 0.31% at $44.61 and West Texas Intermediate losing 0.44% at $43.22 per barrel.

In Australia, the S&P/ASX 200 was off 0.47% at 5,345.70, with the hefty financials and materials subindexes dragging on the benchmark, down 0.53% and 1.31% respectively.

Of the major banks, Australia and New Zealand Banking Group and Westpac Banking Corporation both went ex-dividend, sending their shares down 1.45% and 3.17% respectively.

The sunburnt country’s gold miners were also softer, with Evolution Mining plummeting 9.65%, Newcrest Mining off 7.08% and Northern Star Resources sliding 9.16%.

It was a continuation of the losses seen in the safe haven metal since late last week, when gold’s appeal faded as the markets realised a hasty reaction to Donald Trump’s win in the US presidential election was unwarranted.

The ASX gold subindex was down 7.94% for the session.

New Zealand’s markets were quite literally shaken up after an extraordinary series of earthquakes rocked much of the country - with the most violent tremors focused on the South Island and the capital city of Wellington, where the NZX is based.

The S&P/NZX 50 still finished higher, adding 0.6% to 6,737.76, though the expected cost of the earthquake weighed in insurance stocks, with Tower down 7.06%.

Infrastructure damage was most pronounced in the northern part of the Canterbury region, as well as in the Nelson, Marlborough and Tasman areas, with a number of state highways blocked off and railways lines severed.

There was also substantial structural damage in the coastal town of Kaikoura, with one building collapse killing at least one person, and a tsunami of two metres threatening the area for a time.

The extent of the damage in Kaikoura would not be known for some time as all roads and railway routes remained impassable, though tourists in the popular whalewatching destination were being airlifted out.

Weakness in the Kiwi dollar was also felt as a result of the shaking - it was last 0.39% behind the greenback at NZD 1.4106 per $1.

Analysts compared the weaker dollar to the reaction seen after the much more devastating and deadly Christchurch earthquake in February 2011.

“Sharp falls in the currency in the days following the February 2011 earthquake were reversed in subsequent weeks and months as anticipation of insurance payouts from overseas and the positive economic impact of the rebuilding of Christchurch were factored in,” Ray Attrill noted.

On the other side of the Tasman Sea, the other down under dollar was also weaker, last retreating 0.08% to AUD 1.3259 per $1.