Asia report: Markets mixed as yen heads weaker

Markets in Asia ended mixed on Wednesday, following on from a lower finish in New York on Tuesday, though oil prices retained most of their strength.

Japan led the gainers, as the Nikkei 225 grew 0.9% to close at 16,745.64, while the broader Topix added 0.97% to 1,311.13.

The yen weakened during Wednesday’s session in Tokyo, having reached past the JPY 100 mark against the greenback overnight.

It was last 0.51% weaker at JPY 100.82 per $1.

That relative weakness blew some steam into the country’s major exporters, with Canon adding 1.27% and Honda up 3.38%.

Electronics maker Sharp surged 16.53%, as Taiwanese competitor Hon Hai Precision Industry - better known as iPhone assembler Foxconn - completed its acquisition of the ailing Japanese firm.

On the mainland, the Shanghai Composite eked out a 0.01% gain to 3,110.23, while the Shenzhen Composite grew 0.32% to 2,043.28.

The gains came after confirmation from the politburo on Tuesday that Shenzhen’s stock market will be opened to foreign investors, with plans progressing for a Shenzhen-Hong Kong stock connect programme.

It will work in a similar way to the existing Shanghai-Hong Kong stock connect, which allows Hong Kong investors to trade in Shanghai shares and vice versa.

“Although the markets had expected an announcement after the successful conclusion of some technical issues recently, the Shenzhen-Hong Kong connect is an exorcism of the fallout from the margin financed collapse of mainland stocks in 2015,” said Jefferies strategists in a note.

In South Korea, the Kospi lost 0.2% to settle at 2,043.75, while Hong Kong’s Hang Seng Index slipped 0.48% to 22,799.78.

Hong Kong’s flag carrier Cathay Pacific descended more than 7% during the afternoon, after reports the airline’s net profits dropped 82% in the first half to HKD 353m.

Oil prices did slip slightly during early Asian trading, but retained most of their strength of recent days.

Prices were still muted as Europe took the trading baton, however, with Brent crude last down 1.19% at $48.65 and West Texas Intermediate losing 0.95% to $46.14 per barrel.

In Australia, the S&P/ASX 200 added 0.06% to finish at 5,535.05, paring earlier losses as the energy subindex grew 1.91% and materials gained 0.83%.

On the energy front, Oil Search was up 2.44%, Santos added 0.82% and Woodside Petroleum grew 2.35%.

BHP Billiton was also up by 3.26% in Sydney as southern investors had their first chance to react to the miner’s earnings, reported after Australian hours on Tuesday.

The markets seemed satisfied by the company’s better-than-expected underlying profit, even though it recorded a record loss.

New Zealand’s S&P/NZX 50 closed up 0.6% to close at 7,355.02, boosted by the country’s largest construction firm Fletcher Building, which added 4.9% after posting a 71% rise in full-year profit.

Antipodean investors were also pleased by the company’s outlook for 2017, which it said should be boosted by a residential construction boom in the country’s largest city of Auckland, which has just gone through an entire renovation of its urban plans to allow for more development.

The down under dollars were both weaker, with the Aussie last off 0.8% against the greenback at AUD 1.31 and the Kiwi 0.55% weaker at NZD 1.3813 per $1.