Asia bourses retreat as post-Fed glow fades

Monday 02:20 GMT

Overview

Stocks across Asia were weaker, retreating in line with Wall Street’s slight pullback on Friday from last week’s record highs, and as the US dollar softened.

What to watch

Investors are turning their attention to the Bank of Japan’s policy decision on Tuesday, in the wake of the Federal Reserve’s interest rate rise last week.

While the dollar’s strength over recent weeks seems to at last be bringing the yen under control, it has still had a bumpy ride. The Japanese yen was 0.4 per cent weaker on Monday at ¥117.49 per dollar, having recovered from last week’s 10-month lows beyond ¥‎118.

That came in spite of encouraging trade data for November, published on Monday morning, showing that Japanese imports and exports contracted by the least since the third quarter of 2015.

Equities

Japan’s broad Topix was down 0.3 per cent. Shares in Nintendo were down 4.8 per cent while mobile game partner DeNA was off 7.3 per cent — among the worst performers on the index following a mixed response to last week’s release of Super Mario Run, the first appearance on smartphones by the games maker’s most famous character.

Australia’s S&P/ASX 200 was up 0.7 per cent, while in Hong Kong the Hang Seng was down 0.7 per cent. China’s Shanghai Composite edged up 0.1 per cent as the tech-focused Shenzhen Composite declined 0.2 per cent.

Forex

The US dollar index was 0.3 per cent weaker in Asia at 102.64, facilitating solid gains for the yen, the New Zealand dollar and the Chinese renminbi.

Malaysia’s ringgit was fractionally lower, at its weakest in 15 months and threatening to fall to its lowest since the 1998 Asia financial crisis.

The Australian dollar was flat at $0.7302 against its US counterpart as the market brushed aside concerns that the federal government’s triple-A credit rating could be under threat, as its mid-year budget update showed the deficit had blown out by A$10.3bn over four years. The government is forecasting a return to balance by 2020-21.

Commodities

Oil prices were on track for a third straight day of gains, with Brent crude up 0.8 per cent at $55.63 a barrel and West Texas Intermediate 0.9 per cent higher at $52.37. Prices were buoyed last week by an agreement among non-Opec members to reduce output.

Gold was 0.3 per cent higher in Asia at $1,138.31 an ounce.

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