Asia report: Markets mixed as Filipinos vote

Markets in Asia closed mixed on Tuesday, with Japan leading the way while China fell flat.

The Nikkei 225 finished up 2.15% at 16,565.19

Embattled airbag manufacturer Takata pared back some of its 8% losses earlier in the session to close at 7.35% below the waterline, after the Nikkei reported that more recalls were coming.

The daily business newspaper said the government was pushing carmakers to recall another seven million vehicles with faulty Takata airbags, which would take the total number of recalls to 120 million.

Japan’s yen was trading weaker against the dollar, after its heady strength in hovering around the 106 level last week, It was last trading 0.6% weaker at JPY 108.97 per USD.

BK Asset Management managing director of foreign exchange strategy, Kathy Lien, said short covering was the primary reason for the strong gains in the pair.

“With everyone from the Bank of Japan governor to the finance minister and prime minister of Japan threatening to intervene if foreign exchange moves become too rapid, speculators are finding fewer reason to be remain short dollar/yen.”

On the mainland, the Shanghai Composite Index was almost flat, closing up 0.04% at 2,833.18, while the Shenzhen Composite lost 0.11% to finish at 1,802.27.

Fresh data from Beijing showed China’s consumer price index was up 2.3% year-on-year in April, matching March’s figure and falling just short of a Reuters-polled consensus for a 2.4% increase.

The country’s producer price index for April fell 3.4% year-on-year, less than the 3.8% fall predicted by Reuters-polled analysts.

In Korea, the Kospi closed up 0.75% at 1,982.50, while Hong Kong’s Hang Seng Index added 0.43% to finish at 20,242.68.

A biit further south in the Philippines, the PSE Composite Index finished up 2.62% after it emerged controversial politician Rodrigo Duterte is set to become the country’s new president, after elections were held on Monday.

Duterte, the mayor of Davao - one of the richest city in the archipelago - has previously sparked global anger for such stances and suggesting extrajudicial killings could be a crime-fighting solution.

"Rodrigo Duterte's election platform lacked any content regarding his economic policies, creating considerable uncertainty about his future economic reform agenda,” said IHS Global Insight chief Asia Pacific economist Rajiv Biswas.

The Philippine peso strengthened against the dollar, and was last 0.75% ahead at PHP 46.73 per USD.

Oil prices were ahead during Asian trading, and was still rising as the region went to bed. Brent crude was last up 1.31% at $44.21 per barrel and West Texas Intermediate had added 0.82% at $43.80.

Down under, the S&P/ASX 200 retraced earlier losses to close up 0.42% at 5,342.80, with financials underpinning the performance having gained 1.51%.

Energy and materials lagged behind, closing down 2.32% and 2.01% respectively.

Major resources producers were under pressure after the big slide in commodities prices on Monday. Rio Tinto was down 2.87%, Fortescue lost 6.25% and BHP Billiton slid 3.15% in Sydney.

A weaker Australian dollar looked to be a boost to tourism and travel-focused businesses, with Sydney Airport up 2.22%, hotel operator Mantra Group adding 0.25%, Qantas gaining 2.4% and Virgin Australia rising 3.64%.

The Aussie crept towards the USD for much of the session, and was last 0.69% stronger at AUD 1.3575 against the greenback.

Across the ditch, the S&P/NZX 50 returned to its winning ways and rose 0.4% to a new all-time high of 6,909.41.

Travel was also a theme of the Wellington bourse, with Air New Zealand among the leaders rising 2.6%. The airline is highly exposed to the Australian travel market through its trans-Tasman and Pacific Island operations, and is the largest shareholder in Virgin Australia though it recently indicated it was looking to dispose of it.

Financials were also winning on the eastern side of the Tasman Sea, with Australia and New Zealand Banking Group adding 2.7% and Westpac rising 2.4% in Wellington trading.

The Kiwi was subjected to some very choppy trading throughout the session, and was last 0.18% weaker at NZD 1.4802 against the greenback.