Asian markets began the week on a mixed note Monday, with the Nikkei sinking on profit-taking after breaking 11,000 in early trade, while a rally on Wall Street boosted a buying incentive.
The euro and dollar eased slightly against the yen after climbing in New York trade, while traders took heart from upbeat news from Europe, with indications that the troubled eurozone is slowly emerging from years of crisis.
Tokyo’s benchmark Nikkei index surged above the 11,000 mark for the first time since April 2010 in the morning as the yen extended its recent downward trend but profit-taking soon took hold and the index ended down 0.94 percent, or 102.34 points, at 10,824.31.
Yoshihiro Okumura, general manager at Chibagin Asset Management, said the dollar’s rise above 91 yen and Nikkei hitting the 11,000 mark sparked selling.
“The market has come too far too fast to allow cash to sit on the table,” he told Dow Jones Newswires. “At some point, investors have to lock in gains or risk getting burned.”
A weakening yen has been a key contributor to Tokyo’s recent rally as it makes Japanese exports more competitive overseas.
Takeda Pharmaceutical rose 1.42 percent to 4,615 yen after its diabetes drug won US Food and Drug Administration approval, while retailer Seven & i Holdings, which operates 7-Eleven convenience stores in Japan, was up 3.09 percent at 2,794 yen.
Industrial robotics maker Fanuc dropped 7.00 percent to 13,550 yen after revising down its full-year financial outlook, as Japan’s corporate earnings seasons gets under way this week.
Sony jumped 9.06 percent to 1,407 yen owing to the weak yen and after Merrill Lynch Japan raised its target price on the stock, while Osaka-listed videogame giant Nintendo was up 3.43 percent at 9,630 yen.
Shares in GS Yuasa, which makes Dreamliner batteries, closed up 4.77 percent at 329 yen as Japan’s transport ministry said safety inspectors had found no major problem with the firm’s production line, further muddying the waters in a worldwide probe of Boeing’s next-generation aircraft.
The Seoul index dipped 0.36 percent, or 6.98 points, to 1,939.71, while Hong Kong added 0.39 percent, or 91.45 points, to end at 23,671.88.
Shanghai surged 2.41 percent, or 55.21 points, to 2,346.51 after authorities said they would expand the number of securities for margin trading, boosting liquidity hopes.
Sydney and Kuala Lumpur were closed for public holidays.
On currency markets the dollar bought 90.81 yen in early Asian trade, from 90.87 yen in New York late Friday, while the euro was at 122.10 yen from 122.28 yen. The euro also bought $1.3440 from $1.3457 in New York.
Apart from a short-lived rally last week, the yen has seen a continued downtrend since November, when as Japan’s opposition leader Shinzo Abe promised to push for a more aggressive easing of monetary policy.
Abe won a general election last month on that promise and after becoming prime minister has pressured the central bank to follow his government’s policy lead, a move that has been welcomed by markets.
Last week the Bank of Japan adopted a two-percent inflation target and set out plans for indefinite monetary easing.
The euro was also lifted by data Friday showing banks rushing to repay part of emergency funding totalling $1.3 trillion provided by the European Central Bank a year ago to get them through a credit crunch.
ECB chief Mario Draghi told the World Economic Forum in Davos that he saw a new-found tranquility in financial markets and said “all the indices point to a substantial improvement of financial conditions”.
A survey of investor confidence hit its highest level since the start of the eurozone debt crisis in 2010, while another study of business sentiment was at a seven-month high.
In the United States another set of strong corporate results Friday — particularly Procter and Gamble and Halliburton — sent the Dow and S&P 500 surging.
The Dow rose 0.51 percent to its best level since October 2007 and the S&P 500 climbed 0.54 percent to finish above 1,500 points for the first time since December 2007, while the Nasdaq added 0.62 percent.
The advances came despite data showing a surprise fall in US new home sales in December and a bigger-than-expected contraction in British economic growth.
Oil prices rose in Asia, with New York’s main contract, light sweet crude for delivery in March gaining 20 cents to $96.08 a barrel in the afternoon and Brent North Sea crude for March up two cents to $113.30.
Gold was at $1,658.90 at 0805 GMT compared with $1,669.20 late Friday.
In other markets:
– Taipei added 0.55 percent, or 42.09 points, to 7,714.67.
Leading integrated circuits design house MediaTek gained 0.93 percent at Tw$325.0 while Taiwan Semiconductor Manufacturing Co was 0.30 percent higher at Tw$99.3.
– Manila closed 0.40 percent higher, adding 24.78 points to 6,192.42.
Energy Development Corp. gained 2.43 percent to 7.15 pesos while Manila Electric Co. rose 3.37 percent to 294.20 pesos but Ayala Corp. fell 0.27 percent to 550 pesos.
– Wellington rose 0.11 percent, or 4.62 points, to 4,204.44.
Fletcher Building gained 0.11 percent to NZ$9.21, Trade Me added 0.24 percent to NZ$4.15 and Telecom put on 0.21 percent to NZ$2.39.
Asian markets mixed, Nikkei dips on profit-taking
