Asia report: Markets end the week mixed

Markets in Asia ended Friday mixed, with the turbulent Japanese benchmark reversing losses as the yen weakened from this week’s highs.

The Nikkei 225 closed up 0.46% at 15,821.52. It reversed losses of more than 1%, after the country’s finance minister Taro Aso said Tokyo would take action to quell the yen’s rampant climb.

Despite Friday’s result, the index was still down more than 2% for the week.

Overnight, the yen hit levels as strong as JPY 107.67 but recovered slightly during Asian trading against the greenback. It was last 0.67% weaker at JPY 108.93.

"Alarms should be ringing at the Ministry of Finance and Bank of Japan," noted BK Asset Management managing director of foreign exchange strategy Kathy Lien before Aso’s comments.

"However, everything that we have heard from the Japanese government so far suggests that they are not ready to intervene in the foreign exchange market to lower the value of their currency."

The weaker yen helped the major exporters to reverse their losses, with Honda up 1.07%, Nissan adding 2.35%, Sony rising 1.37% and Toyota finished up 0.79%.

Japanese retailer Fast Retailing slid 12.73% after the firm shaved its profit forecast on Thursday.

In the second quarter to the end of February, the Uniqlo operator reported an operating profit of JPY 23.4bn, down from JPY 58.7bn a year earlier. It said it expected full-year operating profit to total JPY 120bn, compared to a previous outlook of JPY 180bn.

Markets on the mainland were lower, with the Shanghai Composite down 0.75% at 2,985.75 and the Shenzhen Composite losing 0.82% at 1,914.32.

Early in the day, the People’s Bank of China set renminbi at CNY 6.4733 to the dollar. The onshore yuan can trade 2% either side of the loose peg.

New data out late on Thursday showed China’s foreign exchange reserves as rising slightly in March to $3.12trn, compares to a Reuters-polled forecast of a drop to $3.18trn from $3.2trn in February.

It was the first monthly increase since November, though reserves were still down from their peak in November 2014, when the country held $3.99trn.

Mizuho Bank’s Cynthia Kalasopatan said there was a number of possible factors for the rise in China's forex reserves, including less pronounced capital outflows, valuation effects, and a reduction in the repayment of external loss.

"It is important to note that despite a rise in FX reserves, capital outflows may still be taking place; valuation effects may have outweighed capital outflow effect."

South Korea’s Kospi finished largely flat at 1,972.05, while Hong Kong’s Hang Seng Index reversed its losses to climb 0.51% at 20,370.40.

Oil prices were ahead during Asian trading, with Brent crude once again topping the $40 per barrel mark. It was last up 3.05% at $40.67, while West Texas Intermediate was up 3.32% at $38.54.

In Australia, the S&P/ASX 200 finished down 0.53% at 4,937.60. Higher oil prices drove Santos up 0.26% and Oil Search higher by 0.31%.

New Zealand’s markets retreated, with the S&P/NZX 50 shedding 0.4% to 6,730.29. International casino operator SkyCity led the losses for a second session after its long-serving chief executive Nigel Morrison resigned on Thursday.

The Aussie dollar moved closer to the USD, and was last 0.49% stronger at AUD 1.3259. The Kiwi dollar also grew stronger, and was last ahead by 0.12% at NZD 1.4737 per USD.