Asia report: Markets finish mixed after poor export data from Japan

Markets in Asia finished in a mixed state on Monday, with bourses in China surging, as investors digested worse-than-expected trade data out of Japan.

In Japan, the Nikkei 225 eked out gains of 0.09% to 22,717.48, as the yen weakened 0.19% against the dollar to last trade at JPY 107.22.

Automation specialist Fanuc rose 1.54%, while among the benchmark’s other major components, fashion firm Fast Retailing lost 1.58% and technology conglomerate SoftBank Group was 2.23% weaker.

The broader Topix index managed gains of 0.2% to end its trading session at 1,577.03.

In fresh data out of Tokyo, exports from Japan plunged 26.2% year-on-year in June, which was worse than the 24.9% picked by economists polled by Reuters.

The figure was slightly better than the 28.3% fall recorded for May, which came as US-bound shipments of cars fell through the floor amid the Covid-19 crisis.

Imports for the month were down 14.4%, which was slightly better than Reuters-polled forecasts for a 16.8% weakening.

On the mainland, the Shanghai Composite rocketed 3.11% to close at 3,314.15, and the smaller, technology-heavy Shenzhen Composite rose 2.68% to 2,216.70.

The People’s Bank of China sated market expectations by standing pat on both the one-year and five-year loan prime rates during the day.

That came after official data last week showed year-on-year economic growth of 3.2% in the second quarter in China, well ahead of the 2.5% analysts polled by Reuters had been expecting.

Investors in China were also greeted with the news on Monday morning that regulators in Beijing had increased the limit on equity asset investment for insurers to 45%, in an apparent attempt to increase the amount of long-term funds in the country’s markets.

South Korea’s Kospi was off 0.14% to 2,198.20, while the Hang Seng Index in Hong Kong slipped 0.12% to 25,057.99.

Leaders in the special administrative region tightened social restrictions once again over the weekend, after more than 100 new Covid-19 cases were reported in 24 hours.

“[The coronavirus situation is] very serious, and there is no sign of it coming under control,” Hong Kong leader Carrie Lam told media.

Both of the blue-chip technology stocks were in the red in Seoul, with Samsung Electronics down 0.37%, and chipmaker SK Hynix 0.84% weaker.

Oil prices were lower as the region went to bed, with Brent crude last down 0.53% at $42.91 per barrel, and West Texas Intermediate falling 0.44% to $40.41.

“Oil lost a little ground last week as it was announced that OPEC+ will increase their output as of next month,” said CMC Markets analyst David Madden.

“In May, the group cut output by 9.7 million barrels per day as a way of propping up the energy market.”

Madden said that the “historic” cut helped oil hit a three-month high in June.

“Last week, it was announced the body would ease up on the production cuts to a reduction of 7.7 million barrels per day as of next month.

“The original agreement stipulated that production would be increased in August, and last week that was confirmed.”

Madden said it was worth nothing that oil had not fallen much from the high in June.

In Australia, the S&P/ASX 200 lost 0.52% to 6,001.60, while across the Tasman Sea, New Zealand’s S&P/NZX 50 was off 0.27% at 11,553.16.

Both of the down under dollars were stronger on the greenback, with the Aussie last ahead 0.03% to AUD 1.4292, and the Kiwi advancing 0.12% to NZD 1.5233.