Asia report: Markets mixed as yen strengthens further

Markets in Asia ended mixed on Wednesday, with a stronger yen sending Japanese shares southwards.

The Nikkei 225 lost 1.31% to 16,465.40, while the broader Topix finished down 1.37% at 1,330.77.

During the session, the yen managed to break closer towards the 100 level against the greenback, though it settled back after the markets closed and was last 0.28% weaker at JPY 100.71 per $1.

The stronger currency sent the major exporters lower, with Honda down 1.82%, Nissan off 2.58%, Sony losing 0.3% and Toyota finishing 2.36% lower.

Electronics maker Sharp went against the trend and closed up 1.54%.

“A top heavy tone for the dollar/yen may continue to prevail, given little discretionary resilience being attached to the dollar, while the potential for investor nervousness may continue to lurk in the background,” notes OCBC Bank’s Emmanuel Ng.

Banks in the country were also sharply lower, after Bank of Japan governor told a meeting of business leaders earlier in the week that the central bank was ready to use every weapon in its arsenal to achieve the target of 2% inflation, not ruling out the cutting of interest rates further into negative territory.

Mitsubishi UFJ lost 3.23%, Mizuho Financial was down 3.87% and SMFG slid 4.08%.

On the mainland, the Shanghai Composite closed down 0.34% tp 2,988.12, while the Shenzhen Composite was off 0.15% at 1,978.30.

South Korea’s Kospi lost 0.47% to 2,053.06, while Hong Kong’s Hang Seng Index managed a 0.2% rise by end of trading to 23,619.65.

Postal Savings Bank of China had a disappointing debut on the Hong Kong bourse, ending the day in line with its IPO price of HKD 4.76.

The state-owned mainland-based lender led the world’s biggest IPO in two years, raising $7.4bn.

Oil prices were down during Asian trading, after an elusive production freeze deal between OPEC producing nations apparently failed to materialise on the sidelines of an energy conference in Algeria.

“Iran is in a very strong bargaining position given that the lifting of sanctions has outweighed the effects of the ongoing oil price weakness, while Saudi Arabia's fiscal situation continues to deteriorate,” said IG market analyst Angus Nicholson.

Prices started to recover as Europe took the trading baton, however, and Brent crude was last up 0.65% at $46.27, with West Texas Intermediate adding 0.5% to $44.89 per barrel.

In Australia, the S&P/ASX 200 managed to finish 0.12% higher at 5,412.40, as the weighty financials subindex ended the day virtually flat.

Energy was down, however, losing 1.25%, while the gold sector ended the day 2.12% lower.

New Zealand’s S&P/NZX 50 also produced a rise, adding 0.5% to 7,290.45, led by recoveries from broadband infrastructure owner Chorus, technology firm Orion Health, and Air New Zealand.

The down under dollars were mixed, with the Kiwi last 0.57% weaker against the greenback at NZD 1.3776, and the Aussie 0.07% firmer at AUD 1.3034 per $1.