ASIA MARKETS: Nikkei Climbs On Hopes For Bigger-than-expected Stimulus For Japan
July 27 2016 - 05:34AM
Dow Jones News
By Kenan Machado
Apple earnings boost Taiwan stocks
Japan's bigger-than-expected stimulus package failed to lift
shares in Asia beyond its home market Wednesday, as China warned
against speculative trade.
The Nikkei Stock Average rose as much as 2.7% during the
session, before paring gains to close up 1.7%.
A report citing Japanese Prime Minister Shinzo Abe as saying
that the planned economic stimulus will be more than double the
amount expected by the market, as well as plans by the Bank of
Japan to issue 50-year bonds for the first time
(http://www.marketwatch.com/story/japan-boldly-considers-issuing-50-year-bonds-2016-07-26),
lifted broad buying interest in local equities.
Nonetheless, the earlier rise in the yen dampened any joy from
robust earnings.
Japan's Fujifilm Holdings Corp. (4901.TO) reported a 54% on-year
decline in its fiscal first-quarter net income, after the yen's
strength drained Yen8.3 billion from its profits. Still, the stock
ended the day up 2.0%.
On Wednesday, the yen against rival currencies amid changing
expectations from the soon-to-be released stimulus steps. The yen
was last trading lower, with the dollar at Yen105.62.
"The movement of the yen has far greater fallout (impact on
Asian markets) than the stimulus," said Daniel Morris, senior
investment strategist at BNP Paribas Investment Partners.
The stimulus news in Japan did little to lift demand for stocks
in other markets. Australia's S&P ASX/200 was flat, South
Korea's Kospi .1%, and Hong Kong's Hang Seng Index ended up 0.4%.
Taiwan's Taiex was also up 0.4% as its mobile-component makers
benefited from Apple Inc.'s (AAPL) earnings.
Meanwhile, the Shanghai Composite lost as much as 3.6% on
Wednesday, before recovering to close down 1.9%, after regulators
adopted a tougher stance against speculative trading in some themed
stocks. Also, China's securities regulator warned of risks to its
citizens from investing in overseas stocks through online brokerage
firms.
"China is trying to limit the ways in which the capital can leak
through, said Alex Wijaya, a Senior Sales Trader at CMC Markets.
But "it is kind of hard to differentiate between legitimate and
illegitimate operators," he said about the crackdown on online
brokers.
For now, the market's attention will be on the U.S. Federal
Reserve's rate decision later Wednesday, as well as the Bank of
Japan monetary policy decision Friday. Any move by the BOJ is more
important to Asia than any fiscal stimulus package, said BNP
Paribas's Morris.
Read:Why the Fed won't hike rates despite having its 'ducks' in
a row
(http://www.marketwatch.com/story/why-the-fed-wont-hike-rates-despite-having-its-ducks-in-a-row-2016-07-26)
(END) Dow Jones Newswires
July 27, 2016 05:19 ET (09:19 GMT)
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