Asia report: Most markets higher as oil prices rise, RBNZ stands pat

Markets in Asia finished mostly higher on Thursday, as traders focussed on improving oil prices and the Reserve Bank of New Zealand stood pat on its record low interest rates.

In Japan, the Nikkei 225 added 0.31% to finish at 19,961.55, as the yen strengthened.

It was last ahead 0.25% against the greenback to JPY 114 per $1.

Toyota shares recovered after the carmaker released forecasts on Wednesday that full-year profits would be down 20% as sales slowed in the US and marketing costs increased.

Nomura maintained its ‘buy’ rating on Toyota this week, despite the profit expectations, citing its share buyback proposals as being behind the decision.

The company said it wanted to repurchase 1.65% of its shares.

Shares in Toyota were up 0.69% by the close on Thursday.

Softbank was another company on the up, as investors got their chance to react to the telecommunications conglomerate’s results, released after the close on Wednesday.

The company said annual profits were up 13% year-on-year, but it still had massive derivative losses on its books, equivalent to $2.2bn.

Its shares finished 2.01% firmer in Tokyo.

On the mainland, the Shanghai Composite finished up 0.29% at 3,061.74, while the smaller, technology-focussed Shenzhen Composite was 0.19% lower at 1,819.92.

South Korea’s Kospi was 1.16% firmer at 2,296.37, while Hong Kong’s Hang Seng Index finished 0.44% higher at 25,125.55.

Oil prices were higher, after inventories in the US showed their biggest seven-day fall in 2017 so far.

Brent crude was last up 1.45% at $50.96 per barrel, while West Texas Intermediate added 1.48% to $48.04.

In Australia, the S&P/ASX 200 was up 0.05% at 5,878.34, with National Australia Bank managing gains of 0.31%.

The bank confirmed during the session that it was selling its Singapore and Hong Kong private wealth division to Oversea-Chinese Banking Corporation (OCBC).

OCBC’s shares were up 0.96% on the news in Singapore trading.

New Zealand’s S&P/NZX 50 was up 0.9% to 7,489.71, led higher by global accounting software provider Xero, which added 5.3% as it reported narrower net losses and inched closer to profitability.

The country’s central bank kept its official cash rate steady at 1.75% - the lowest ever in the South Pacific economy.

Its decision was accompanied by dovish remarks from Governor Graeme Wheeler, who said inflation pressure was not as much as expected, and as such there was no longer any rush to raise interest rates.

“So it's a situation where we'll watch things very carefully but at this point we felt the market had got a bit ahead of itself.”

Rabobank’s senior foreign exchange strategist Jane Foley said the Reserve Bank’s view was at odds with the more hawkish views of many commentators.

“There are various scenarios that could explain why there appears to be a divergence of view between the central bank and the market consensus.

“It is our view that the central bank is justified in its warnings of ‘major challenges’ over ‘ongoing surplus capacity and extensive political uncertainty’ are justified.

“That said, it is possible that the central bank saw an opportunity to take advantage of the market’s more hawkish view to verbally manipulate the NZD lower.”

The down under dollars were mixed, with the Kiwi sharply weaker on the back of the interest rate news.

It was last behind 1.33% at NZD 1.4612 to the greenback, while the Aussie strengthened 0.09% to AUD 1.3562 per $1.