Asia report: Most markets higher as yen slides against greenback

Most markets in Asia finished higher on Tuesday, with traders turning away from the safe haven yen which dropped sharply to its weakest levels against the dollar in four months.

Japan’s Nikkei 225 finished up 0.57% at 20,195.48, with the yen last 0.23% weaker against the greenback at JPY 114.30.

Focus was on Japanese government bonds and the rate differential between them and the US Treasury bonds, as the Bank of Japan continued its policy of quantitative easing, while the Fed seemed to be ramping to a more hawkish policy.

Reuters reported that the spread between the 10-year Japanese government and Treasury yields were at a two month high.

Japan Post Holdings was ahead 1.85%, as investors digested news the country’s Ministry of Finance would no longer sell its holding in the postal operator.

Carmaker Suzuki was down 1.77%, after it emerged prosecutors in the Netherlands were investigating an alleged misuse of emissions testing software.

On the mainland, the Shanghai Composite was down 0.29% at 3,203.18, while the smaller tech-heavy Shenzhen Composite lost 0.72% to 1,891.60.

South Korea’s Kospi was up 0.58% at 2,396.00, and the Hang Seng Index in Hong Kong finished 1.48% firmer at 25,877.64.

Gambling stocks were stronger in Hong Kong, with Galaxy Entertainment adding 0.43%, Sands China ahead 0.87% and Wynn Macau 0.91% stronger.

It came after data suggested daily gross gaming revenues surged 76% on casino floors in Macau last week, compared to the previous seven days.

The celebrations would be short lived, Nomura analysts noted, with monthly gross gaming revenue growth expected to slow in the second half of 2017.

It was a quieter day volumes wise in Asia, with much attention turning to the direction the US Federal Reserve was heading.

“Amid quiet markets, it is worth pondering the potential impact of the Fed's signaled paring back of its balance sheet,” noted analysts at ANZ Research.

“We think there is some logic to the argument that the asset classes that benefited the most from quantitative easing are likely to be among those that might suffer most as it is unwound.”

Oil prices were up slightly during Asian trading, though they declined as Europe took the trading baton, with Brent crude last down 0.84% at $46.49 per barrel and West Texas Intermediate off 0.89% at $44.01.

In Australia, the S&P/ASX 200 eked out gains of 0.08% to 5,728.93, while New Zealand’s S&P/NZX 50 finished up 0.6% at 7,628.57.

The down under dollars were mixed, with the Aussie last 0.02% stronger on the greenback at AUD 1.3143, while the Kiwi weakened 0.82% to NZD 1.3857.