Asia report: Mixed Monday as yen drags Nikkei

Markets in Asia ended Monday mixed, with a stronger yen putting pressure on equities in Japan.

The benchmark Nikkei 225 lost 0.49% to finish at 16,654.60, paring back some of its earlier losses of 1.5%.

Japan’s Ministry of Finance released data during the session that showed exports were down 10.1% year-on-year in April, as a result of slowing demand from China, the US and emerging economies.

The reading was more or less in line with a Reuters-polled forecast for a 10% decline.

Imports in April were down 23.3% year-on-year, with the trade balance reducing JPY 823.47bn.

After the release, the yen grew stronger and was last 0.49% ahead at JPY 109.61.

The major exporters ended the session mixed, with Honda up 0.2%, Nissan adding 0.48% and Toyota losing 1.01%.

On the mainland, the Shanghai Composite finished up 0.66% to 2,844.01, while the Shenzhen Composite added 1.45% to 1,820.99.

In Korea, the Kospi was up 0.39% by end of play at 1,955.25, while in Hong Kong the Hang Seng Index gave up its gainful start to the day to end up down 0.22% at 19,809.03.

Analysts noted that investors in the region still seemed to be digesting what last week’s hawkish Federal Reserve April minutes mean for their portfolios.

“Many investors at first seem to dismiss impending Fed hikes as inconsequential, only to worry once they have arrived,” said HSBC co-head of Asian economics research Frederic Neumann.

“Any tweaks to its policy stance will quickly reverberate across the region,” he added.

“This need not be terminal, and it likely won't cause outright financial stress. But it'll get bumpy.”

Oil prices were down during Asian trading, and continued to slide early in Europe. Brent crude was last down 0.7% at $48.38 per barrel, and West Texas Intermediate lost 0.9% at $47.98.

Australia’s S&P/ASX 200 was choppy for much of the day, before finishing 0.6% below the waterline at 5,318.94, dragged down by the big banks and miners.

BHP Billiton lost 2.55%, Fortescue Metals was down 3.96% and Rio Tinto was off 2.31% by the end of the session.

The weighty financials subindex saw Australia and New Zealand Banking Group lose 0.56%, Commonwealth Bank of Australia down 0.2%, National Australia Bank off 0.55% and Westpac dropping 1.25%.

Rising bad debts, falling earnings and fears of a property bubble - particularly in Sydney - were seeing many hedge funds betting against the big banks in Australia, the Wall Street Journal reported on Sunday.

Aussie steelmaker Bluescope was an exception to the drops on Monday, after it increased its earnings guidance for the year to 30 June.

Its board said it expects underlying EBIT for the weekend to be around AUD 270m.

In New Zealand, the S&P/NZX 50 dropped 0.03% to 6,907.77 as the local market began earnings season.

Health software developer Orion Health lost 2.2% after posting a smaller loss for the year to March 31, while honey exporter Comvita gained 4.3% to an all-time high.

Flag carrier Air New Zealand was the benchmark’s worst performer, losing 2.8%.

The down under dollars moved closer to the greenback, with the Kiwi last 0.39% stronger at NZD 1.4727, and the Aussie just edging in at AUD 1.3845 per USD.