Asian Markets, Fundamentals

Stocks in Asia/Pacific Mixed, Japan Finance Minister Fujii Curbs Speculation for BoJ Intervention

Asia Session Key Developments

• Japan’s Leading Index Rises For the Seventh Month
• Australian Wage Growth Slows in August

The Asian equities market were mixed on Thursday, with the Nikkei 225 trading lower for a second day as Japan’s Finance Minister, Hirohisa Fujii, said the government’s effort to stem the appreciation in the exchange rate could weigh on economic growth going forward. Meanwhile, the Japanese leading and coincident index rose to 86.4 and 92.7 successively in September to the seventh consecutive monthly advance, while nationwide department store sales slumped at an annual pace of 10.5% in October after contracting 7.8% in the previous month. Moreover, the economic docket showed Australia sold A$307 million in the spot foreign exchange market during October, while average weekly wages grew at an annualized pace of 5.2% in August after increasing 6.1% in the previous month.

Nikkei 225                          9,549.47

The Japanese equity market traded lower for a third successive day, with the Nikkei 225 sliding 127.33 points (1.32%) to end the trade at 9,549.47. Consumer services plunged 3.49% to lead the decline, followed by a 1.66% loss in consumer goods, while oil & gas climbed 0.23% to taper the decline. Shares of Mitsubishi Rayon surged 29.52% to mark the biggest rally since September 1974 on speculation Mitsubishi Chemicals may look to buyout the firm for approximately JPY 200B, while Mitsubishi UFJ Financial slipped 3.72% as the firm confirmed plans to sell securities to raise as much as JPY 1T. At the same time, Mitsui Chemicals plummeted 7.08% after Credit Suisse stated the government’s Tax Commission may remove naptha, a material for petrochemical products, from duty exemption, while NEC slumped 3.15% after the firm sold JPY 117.6B in new shares to repay debt and fund business operations.

Hang Seng                        22,643.16

Hong Kong shares closed lower on Thursday, leading the benchmark equity index to shed 191.17 points (0.86%) and end the trade at 22,643.16 as 6 of the 9 components declined on the day. Shares of Industrial & Commercial Bank of China slumped 2.42% as investors turned skeptical of China Minsheng Banking Corp’s HK$30 billion share sales, which was offered at 1.77 times its book value, while China Mobile, the world’s biggest phone carrier by market value gained 1.71% as the company seeks to boost business with an agreement to sell blackberry handsets in China. Meanwhile, China Petroleum & Chemical lost 0.73% as China Finance Information reported that China won’t raise natural gas prices this year, while China Resources Enterprise advanced 3.64% as the firm announced a 55% rise on third-quarter profits.

S&P/ASX 200 Index           4,749.20

Stocks in Australia climbed higher for a second straight day, leading the S&P/ASX 200 to advance 10.20 points (0.22%) and close at 4,749.20, with 3 of the 10 components gaining on the day. Shares of Newcrest Mining, Australia’s largest gold producer added 1.55% as gold prices advanced to a new record high in New York, while Aquarius Platinum surged 7.17% as the firm seeks early approval for Phase 2 of production at its Everest mine in South Africa. At the same time, Macarthur Coal shed 2.06% as RBC Capital downgraded the company’s stock from “sector perform” to “underperform,” with Paladin Energy tumbling 3.86% after RBS lowered its rating of the company from “buy” to “hold.”

Notable Asian Session Event Risk / Economic Releases