Asia report: Stocks mixed on Japan data, China rate hold

Markets closed in a mixed state in Asia on Thursday, with Chinese bourses in negative territory as the central bank there kept medium-term interest rates on hold.

In Japan, the Nikkei 225 was up 0.21% at 27,875.91, as the yen weakened 0.35% against the dollar to last trade at JPY 143.58.

Tech investing giant SoftBank Group was ahead 0.61% and Uniqlo owner Fast Retailing added 0.73%, while robotics specialist Fanuc was down 0.05%.

The broader Topix index managed gains of 0.15% by the end of trading in Tokyo, settling at 1,950.43.

In economic news out of Japan, the country reported a record trade deficit for August, as exports grew 22.1% while imports rocketed 49.9% year-on-year.

That led to a trade deficit of JPY 2.82trn - the highest-ever official figure.

“Base effects should again prove supportive in September, before reality reasserts itself in the year-on-year comparison,” said Craig Botham at Pantheon Macroeconomics.

“Monthly trade, however, should continue to slow, reflecting the broader slowdown in global demand, and China’s woes especially.”

On the mainland, the Shanghai Composite was down 1.16% to 3,199.92, and the technology-centric Shenzhen Component was 2.1% weaker at 11,526.96.

The People’s Bank of China stood pat on its medium-term facility loans rate at 2.75%, which was in line with the expectations of analysts polled by Reuters.

“The apparent calm of today’s actions by the PBoC belies the further withdrawal of policy liquidity,” Pantheon’s Craig Botham noted.

“The injection of CNY 400bn in liquidity is unchanged from August, but CNY 200bn lower than the CNY 600bn maturing.”

Botham said that, for all the talk of policy support, the central bank was “quietly stepping back” for the moment.

“We think this reflects the unfortunate reality of China’s liquidity trap, and the ongoing pressure on the renminbi.

“Monetary easing does more harm than good, at the moment.”

South Korea’s Kospi slipped 0.4% to 2,401.83, while the Hang Seng Index in Hong Kong advanced 0.44% to 18,930.38.

The blue-chip technology stocks were on the back foot in Seoul, with Samsung Electronics down 1.41% and SK Hynix losing 1.08%.

“Asian markets were mixed to positive in undulating sentiment,” said Interactive Investor head of markets Richard Hunter on the wider regional picture.

“In Japan, data revealed that the country had posted a record trade deficit in August, driven by weakness in the yen which had a negative impact on the cost of the country’s imports, and it remains to be seen whether currency intervention may follow.

“More positively, there was a boost for Chinese property developers as shares rose on hopes that the authorities would be rolling out measures to provide support for the beleaguered sector.”

Oil prices were lower as the region went to bed, with Brent crude futures last down 0.68% at $93.46 per barrel on ICE, and the NYMEX quote for West Texas Intermediate 0.64% lower at $87.91.

In Australia, the S&P/ASX 200 rose 0.21% to 6,842.90, as fresh data out of Canberra showed the country added 33,500 jobs in August, making for a seasonally-adjusted 0.2% rise from July.

The country’s unemployment rate rose to 3.5%, while the market participation rate increased slightly to 66.6% from 66.4% in the previous month.

Across the Tasman Sea, New Zealand’s S&P/NZX 50 eked out a rise of 0.01% to 11,658.94, as the country’s economy expanded in the June quarter.

According to official data out of Wellington, gross domestic product rose by 1.7% in the three months through June, swinging from the 0.2% contraction in the prior quarter.

The transport, postal and warehousing sectors underpinned the rise, with the subindex ahead 19.7%, while arts, recreation and other services were 9% firmer amid the relaxation of strict Covid-19 rules.

Both of the down under dollars were weaker against the greenback, with the Aussie last off 0.32% at AUD 1.4867, and the Kiwi retreating 0.28% to NZD 1.6704.

Reporting by Josh White at Sharecast.com.