Asian Markets, Fundamentals

Stocks in Asia/Pacific Mix, Japan Prime Minister Hatoyama Wants Firm Measures Against Yen Strength

Asia Session Key Developments

• Japan’s Industrial Production Rises for 11^th Straight Month
• Hong Kong Producer Prices Extend Three Month Decline

Stocks in Asia/Pacific were mixed on Friday amid speculation that Japan’s central bank will add additional funds to the financial system, while the Hang Seng tipped lower on speculation China’s government will tighten policy later this year. Taking a look at the economic docket, industrial production in Japan soared 18.5% in January, with the reading rising for the eleventh consecutive month, while Prime Minister Hatoyama stated that the government must take “firm measures” to keep the rising yen from hurting the economy. In addition producer prices in Hong Kong retreated 0.3% in the fourth-quarter after contracting 2.0% during the previous three-month period, while industrial outputs slipped at an annual pace of 4.9% during the same period after weakening 8.6% in the third quarter.

Nikkei 225                          10,751.26

Stocks in Japan extended yesterday’s advance, leading the Nikkei 225 to advance 86.31 points (0.81%) on Friday and close at 10,751.26. Nine out of the ten components pushed higher on the day, with basic materials leading the way, climbing 1.42%, while oil & gas slid 0.18%. Shares of Fuji Heavy Industries added 4.08% as Mitsubishi UFJ rated the company’s stock “strong outperform,” while Isuzu Motors surged 3.96% as the truck makers was rated “outer perform” by Mitsubishi. In addition, Kobe Steel pushed 2.81% higher on the back of higher metal prices, while Mitsui Chemicals retreated 1.47% as the company looks to shut down an ethylene plant in Chiba on February 28^th, which may have cost the company about 3 billion yen.

Hang Seng                        21,209.74

The Hong Kong equity market halted its five-day advance, with the benchmark equity index shedding 18.46 points (0.09%) and closing at 21,209.74. Six out of the nine components tumbled on the day, with consumer goods falling1.74%, which was followed by a 1.15% decline in technology.  Shares of Henderson Land Development pushed 2.72% higher as Sun Hung Kai Chairwoman expects the expansion in the housing market to continue for another year, while CNOOC increased 0.78% as the company, along with Total SA are expected to split a two-third stake in Tullow Oil Plc’s. Moreover, PetroChina rose 0.54% on the back of higher energy prices, while Bank of China climbed 0.25% as the nation’s best-performing primary-market debt fund stated that China’s Yuan bonds will return as much as 6% this year.

S&P/ASX 200 Index           4,818.10

Shares in Australia pared yesterday’s decline, leading the S&P/ASX 200 to rise 3.90 points (0.08%) and close at 4,818.10. Three out of the ten components rose on the day, with oil & gas leading the way, climbing 0.71%, while technology slid 1.08% to taper the advance.  Shares of Woodside Petroleum added 0.31% as crude-oil futures in New York rose 0.1%, while CuDeco soared 5.80% as the company is in “wide-ranging” talks with Xiangguang Copper and Sinosteel Group over its Rocklands project. At the same time, Alesco soared 3.29% as the company was raised from “sell” to “hold,” while Newcrest Mining gained 0.91% on the back of higher commodity prices.

Notable Asian Session Event Risk / Economic Releases