Asia report: Most markets lower as greenback surges

Markets in Asia finished mostly lower on Thursday, with the greenback rising fast after the Federal Reserve made its first interest rate rise of the year, combined with a hawkish outlook for its rate decisions next year.

Japan’s Nikkei 225 eked out a 0.1% gain to 19,273.79, paring back a rise of almost 1% earlier in the day.

The yen was under pressure from the dollar’s surge, as it fell to one of its lowest points of the year against the greenback.

It was last 1.2% weaker at JPY 118.44 per $1.

The major carmaking exporters were an exception to the market’s losses, with the weaker yen the catalyst as it would lead to an increase in the value of overseas profits.

Honda added 1.27%, Suzuki Motor was 1.21% higher and Toyota finished 1.46% firmer.

On the mainland, the Shanghai Composite lost 0.71% to 3,118.32, while the Shenzhen Composite bucked the trend and added 0.67% to 1,972.90.

In South Korea, the Kospi was virtually flat, losing 0.01% to 2,036.65, while Hong Kong’s Hang Seng Index slid 1.77% to 22,059.40.

The Bank of Korea stood pat on rates for the sixth straight month, keeping it at 1.25%, which was widely expected.

Governor Lee Ju-yeol said in his statement that the biggest concern facing the peninsula’s economy at the moment was the political scandal surrounding impeached President Park Geun-hye.

The impeachment, voted for by Seoul’s parliament last week, had caused a worsening of economic sentiment, Lee said, though the country’s superior court still had the final say on Park’s fate.

Hong Kong’s poor showing could be put down to the special administrative region’s currency policies, with the Hong Kong dollar pegged to the greenback.

A stronger HKD could make exports more expensive, and local borrowing more expensive.

Chinese software developer Meitu saw its shares tumble 4.21% to HKD 8.41, after opening at HKD 8.78.

That opening price was at a premium to its IPO price of HKD 8.50, with the company - which develops an app designed to touch up selfies - recently valued at more than $4.5bn in its IPO.

The US Federal Reserve confirmed its widely-anticipated 25 basis point rate increase overnight, but its so-called ‘dot-plot’ projection for three rate hikes in 2017 was a cause for investor concern.

“The 2017 dot-plot was revised higher as well, with 11 out of 17 Fed officials expecting three rate hikes next year, up from September's median of two rate hikes,” noted Mizuho Bank foreign exchange strategist Chang Wei Liang.

Oil prices were another sufferer of the stronger greenback, though they began to pick up again in early European trading, with Brent crude last up 0.94% at $54.41 per barrel and West Texas Intermediate recovering 0.51% at $51.30.

In Australia, the S&P/ASX 200 finished down 0.82% at 5,538.60, with energy and gold the losing subindexes of the day, off 3.39% and 4.98% respectively.

The continent’s jobs market improved in November, according to fresh data, with 39,100 more people in work during the month - well ahead of a Reuters-polled forecast for a 20,000 increase.

Unemployment also rose, however, to a higher-than-expected 5.7% figure, from the 5.6% recorded in October.

Total employment and the unemployment rate can rise simultaneously if the number of people entering the labour market exceeds the number of new jobs.

Asia Pacific gambling giant Crown Resorts issued a profit warning, saying its revenue would be down 12% in the first half thanks to a weaker VIP division.

It also announced it was raising AUD 1.6bn through the sale of shares in Melco Crown Entertainment.

Crown’s stock was halted for trading in Sydney for the session.

In New Zealand, the S&P/NZX 50 lost 0.7% to 6,748.62, led lower by poultry producer Tegel Group.

The company, only recently taken public after a period of private equity ownership, posted a 4% drop in first half earnings as a glut of chicken kept prices low in the country.

It now expected underlying EBITDA of NZD 75m-85m, revised from a previous proforma figure of NZD 84m for the 2017 year.

Both of the down under dollars were weaker against the greenback, with the Aussie last retreating 0.28% to AUD 1.3541 and the Kiwi off 0.7% at NZD 1.4146 per $1.