Asia report: Oil and Japan lead markets higher

Most markets in Asia ended Tuesday in the black, after a settling in oil prices and a jump in Japanese stocks.

Tokyo’s benchmark Nikkei 225 jumped 3.68% to finish at 16,874.44, essentially retracing the 3.4% loss it experienced in Monday trading after a series of devastating earthquakes in the south of the country.

The yen marched onwards towards the US dollar once again, and once again touched the 108 level before slipping back sharply after the close. It was last 0.28% weaker at JPY 109.13 per USD.

Major exporters were mostly involved in the market rebound, with the automakers all up - Toyota added 3.9%, Nissan was up 3.57% and Honda gained 4.46%. Sony was ahead by 6.49% at close.

Both Sony and Honda have production plants in the region affected by the earthquakes, with both boards confirming the production lines will remain suspended for the time being.

Toyota had also partially suspended its vehicle assembly lines, due to supply shortages after the disaster.

In corporate news, the Nikkei reported that the board of Seven & i Holdings - owner of the 7-Eleven brand and chain of convenience stores globally - is likely to approve a new management team. Seven & i shares closed up 1.2%.

On the mainland, the Shanghai Composite Index finished ahead 0.31% at 3,042.94, while the Shenzhen Composite was up 0.29% at 1,958.20.

South Korea’s Kospi was up 0.11% at 2,011.36 by close, and Hong Kong’s Hang Seng Index finished at 21,436.21 - a 1.3% rise.

The central bank in Korea held interest rates steady in the country at 1.5%, in line with a Reuters-polled forecast. In a statement, the Bank of Korea said it believes the domestic economy will show “a trend of modest improvement going forward.”

Korea’s won strengthened against the dollar, and was last ahead by 1.23% at KRW 1,136.28 per USD.

Oil strode ahead during Asian trading, after paring back its losses during US hours overnight. Brent crude was last up 1.11% at $43.39, while West Texas Intermediate advanced 0.92% to $40.15 per barrel.

The rebound was supported by a Kuwaiti oil workers strike, leading to a sizeable downturn in production there. Oil had slipped sharply on sunday after a meeting of producing nations in Doha failed to produce an anticipated production freeze.

"Investors were relieved that oil did not fall 10 percent on the back of the Doha meeting and they were quick to reward risk currencies like the Australian and New Zealand dollars with gains," said BK Asset Management managing director of foreign exchange strategy Kathy Lien.

In Australia, and S&P/ASX 200 added 1.01% to close at 5,188.80, with energy and materials leading the gains.

Energy was particularly underpinned by the rebound in oil prices, with Santos adding 5.15%, Oil Search advancing 4.98% and Woodside Petroleum up 4.03%.

The Reserve Bank of Australia released the minutes of its most recent meeting on Tuesday, in which it expresses further concern for the strengthening Australian dollar.

“An appreciating exchange rate could complicate progress in activity rebalancing towards the non-mining sectors of the economy,” the central bank said, adding that low inflation could lead to a further interest rate cut.

In a statement to the ASX, Rio Tinto cut its 2017 production guidance for its Australian iron ore mines due to a delay in its autonomous heavy-haul AutoHaul railway system. It now expected production from Pilbara to be between 330 million and 340 million tonnes in 2017, instead of 350 million.

Shares in New Zealand rose to a new all-time high, with the S&P/NZX 50 up 0.3% to 6,873.04.

Fuel refiner and retailer Z Energy led the index, up 3.7%. The firm is currently facing competition regulators over a bid to buy Chevron’s New Zealand assets, including the Caltex and Challenge retail networks, which would give Z a 49% share of the domestic petrol market.

Both of the down under dollars edged closer to the USD, with the Aussie last 0.33% stronger at AUD 1.2861 per dollar and the Kiwi ahead by 0.82% at NZD 1.4268.