By Daniel Inman
Japanese stocks led Asian markets higher on Thursday after
third-quarter growth data beat expectations, while renewed
expectations that the U.S. Federal Reserve would maintain its
stimulus weighed on the dollar.
Japan's gross domestic product grew at an annualized rate of
1.9% in the three-month period that ended in September. Although
the result represents a sharp slowdown from the second quarter,
when the economy grew by 3.8%, the lower number was anticipated. In
fact, the reading exceeded a 1.7% forecast by economists polled by
The Wall Street Journal.
The growth data is the latest check on the progress of a range
of pro-growth policies in Japan, known as "Abenomics". These
measures include aggressive monetary easing from the Bank of Japan
that has pushed down the value of the yen, contributing to a 41.7%
year-to-date gain on the Nikkei so far this year.
The Nikkei rose in early trade in response to the growth data
and jumped even higher after as the yen weakened. The index was
last up 2.5%, while the dollar (USDJPY) traded at Yen99.65,
compared with Yen99.24 late Wednesday in New York.
The dollar was weaker against a number of Asian currencies after
Federal Reserve chair nominee Janet Yellen released remarks
suggesting the central bank should continue supporting the U.S.
economy with stimulus. In a prepared statement, Yellen said that
unemployment at 7.3% in October was still too high "reflecting a
labor market and economy far short of their potential".
South Korea's won (USDKRW) traded at 1,065.59 won to the dollar,
compared with 1,071.10 won late Wednesday, and the Philippines peso
(USDPHP) rose to 43.57 pesos to the dollar.
The hopes for continued easing from the U.S. also supported
regional stocks, which were recovering from a sharp drop in the
previous session. Stocks across Asia fell on Wednesday after the
Chinese government released a vague communique following a major
political meeting, hurting expectations for economic reform in the
world's second-largest economy.
South Korea's Kospi rose 0.6%, and Australia's S&P/ASX 200 added 0.9%.
In China, Hong Kong's Hang Seng Index rose 0.9%, and the Shanghai Composite climbed 0.5%.
The regional earnings season continued, with major Chinese and
Japanese companies reporting.
Chinese internet conglomerate Tencent Holdings Ltd. (0700.HK)
jumped 5.4% in Hong Kong, after the firm posted a 20% year-on-year
profit growth in the third quarter amid strong gaming revenue.
In Taiwan, Apple Inc.'s (AAPL) key supplier Hon Hai Precision
Industry Co. rose 1.6% after the contract electronics manufacturer
post better-than-expected third quarter net profits and gross
margins.
In Tokyo, Mitsubishi UFJ Financial Group (MTU) and Mizuho
Financial Group (MFG) rose 2.2% and 1.4%, respectively, after the
Nikkei reported that the banks are set to raise their net profit
projections for 2013 on the back of strong fiscal first-half
results.
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