Asia report: Markets mostly higher as Japan exports disappoint

Markets in Asia finished mostly higher on Wednesday, as investors digested disappointing economic data out of Japan, and kept an eye on the Covid-19 situation.

In Japan, the Nikkei 225 was up 0.26% at 26,757.40, as the yen strengthened 0.31% against the dollar to last trade at JPY 103.35.

Of the major components on the benchmark index, automation specialist Fanuc was up 1.11%, fashion firm Fast Retailing added 0.65%, and technology conglomerate SoftBank Group was 0.39% higher.

Apple suppliers were in the green, after the Nikkei reported that the California-based consumer technology giant would increase production of iPhones by around 30% in the first six months of 2021.

Alps Alpine was 7.14% higher, and Sharp added 3.02%.

The broader Topix index was 0.27% firmer by the end of trading in Tokyo, closing at 1,786.83.

Fresh data out of Japan showed the country’s exports as declining 4.2% year-on-year in November - far worse than the 0.5% improvement anticipated by economists polled by Reuters.

“Exports are finally starting to feel the pinch from the renewed virus headwinds internationally, with shipments rising by just 0.9% month-on-month in November, on our adjustment, well below the prior three-month average of nearly 5%,” said Pantheon Macroeconomics senior Asia economist Miguel Chanco.

“Not surprisingly, a pullback in demand from the EU and the US primarily was to blame, shaving close to a full percentage point from the monthly rise.”

Chanco noted that exports to Asia slipped only modestly, by contrast.

“Fortunately, demand from elsewhere was strong enough to more than paper over these temporary cracks, as shipments to the rest of the world jumped by over 15%, more than double the October gain.”

On the mainland, the Shanghai Composite slipped 0.007% to 3,366.98, and the smaller, technology-heavy Shenzhen Composite was off 0.35% at 2,248.51.

South Korea’s Kospi added 0.54% to 2,771.79, while the Hang Seng Index in Hong Kong was 0.97% hither at 26,460.29.

The blue-chip technology stocks were flat in Seoul, with both Samsung Electronics and SK Hynix recording no change by the close.

Hong Kong-listed shares in Chinese chipmaking giant SMIC fell 4.94%, after the company said co-chief executive officer Mong-song Liang was intending to resign.

Index compiler MSCI also announced that the company was among those set to be removed from its global indices.

On the coronavirus front, investors were watching for developments in stimulus negotiations in the United States, as congressional leaders met overnight in a bid to advance talks.

The Federal Reserve’s December meeting was also in focus, with the central bank expected to express a dovish tone later in the global day.

Oil prices were higher by the end of the Asian day, with Brent crude last up 0.36% at $50.94 per barrel, and West Texas Intermediate rising 0.32% to $47.77.

In Australia, the S&P/ASX 200 gained 0.72% to 6,679.20, while across the Tasman Sea, New Zealand’s S&P/NZX 50 was ahead 0.48% at 12,828.99.

Both of the down under dollars were stronger on the greenback, with the Asusie last ahead 0.18% at AUD 1.3208, and the Kiwi advancing 0.29% to NZD 1.4066.