Asian Markets

Asian Markets Close Mixed as Chinese Regulators Counter Positive U.S. Economic Data

Asia Session Key Developments

• Japan Market Rebounds on U.S. Industrial Production and Commodity Prices Rising
• Hong Kong Shares Pare Gains, China Set for Further Steps to Curb Growth
• Australian Stocks Close Flat After Posting Early Gains

Asian Shares Mixed on Wednesday on Stronger U.S. Earnings, Concerns on Growth in China

A jump in U.S. industrial production weighed in positively on Asian shares driving Japan’s Nikkei 225 index up for the first time all week as well as causing Australia’s S&P/ASX 200 index to open higher on the day before the Basic Materials sector dragged the index down to close flat. However good the industrial production numbers were from the U.S., investors still see uncertainty in the market and want to start seeing positive numbers coming from U.S. employment and housing data. Investors in Hong Kong have been weary as the U.S. continues to report a slow economic recovery while Japan recently reported anemic growth, as well as renewed fears that Chinese authorities will tighten lending measures further. Profit-taking in property companies following recent gains and consolidation on China’s mainland stock market led Hong Kong shares lower on Wednesday.

Nikkei 225                        9240.54

Japanese shares rebounded after the past two days losses rising 78.86 points (0.86%) as investors bought shares deemed oversold as fears of the U.S. economy were temporarily eased after positive economic data from the U.S. All 10 components of the index were up on the day with Oil & Gas gaining most at 2.78% while Financials also rose modestly at 1.37%. However, the strengthened yen and the upcoming meeting set for Monday between Prime Minister Naoto Kan and Bank of Japan Chief Masaaki Shirakawa sent many investors to the sides and capped gains. The market is supported on expectations for now – that the meeting will yield economic stimulus or a rein in price on the yen. The Nikkei year-to-date has fallen 12%, the most among benchmark indexes in the world’s five-most developed countries, as the strengthening yen, Europe’s debt crisis, and concern on the slowing economic growth in China and the U.S. have hurt confidence in a global recovery. Honda Motor Co. Ltd. rose 2.4% to 2,827 yen and Canon Inc., the world’s largest maker of digital cameras, gained 1% to close at 3, 580 yen. Nikon Corp. advanced 1.6% to 1,511 yen after Deutsche Securities raised its rating on the firm’s stock to “buy” from “hold”. Motor maker Nidec Corp. was a notable gainer on Wednesday surging 3.4% to 7,390 yen, following an announcement by the firm it plans to buy Emerson Electric Co.’s motors & controls business.

Hang Seng                        21022.73

The Hong Kong market pared the previous two days’ worth of gains dropping 114.70 points (0.54%) after climbing as much as 0.7% as reports saying China will take more steps to curb home prices and potential loan defaults overshadowed gains in the local developers market from the previous day. 7 out of the 9 components were down with Industrials slumping most dropping 0.88% (29% positive) while Consumer Goods rebounded, gaining 0.79% (100% positive). China Overseas declined 2.1% to HK$16 while China Resources Land Ltd., a state-controlled developer, fell 1.4% to HK$15.28. China Construction Bank Corp., the nation’s second-biggest bank by market capitalization, fell by 1.4 % to HK$6.51 as Bank of Communications Co., part-owned by HSBC Holdings Plc, fell 0.5% to HK$8.61. The Hang Seng Index has fallen 6.2% from its highest close this year on January 6^th as China’s efforts to cool its property market and Europe’s debt crisis continues to impair confidence in a global economic recovery.

S&P/ASX 200 Index         4474.90

The S&P/ASX 200 closed flat at 4474.9, down 2.10 points (0.5%) after rising as high as 4494.9 in an initial response to overnight gains on Wall Street. 8 out of the 10 components were up with Industrials and Financials leading the way rising 2.06% and 1.94%, respectively. Basic Materials was down 1.26% dragged by BHP Billiton falling 4.4% to A$38.42 as the company put an unsolicited cash bid of US$38.56 billion for Canada’s Potash Corp of Saskatchewan – investors may worry that BHP could have to pay more than offered for Potash and that BHP’s share price might not do much on the upside until the Potash issue is resolved. Rio Tinto though rose 2.8% to A$73.45 while Fortescue Metals rose 2.6% to A$4.68 and among financials, the major banks rose 0.3-1.3% while Macquarie rose 1.3% to A$38.90.

Notable Asian Session Event Risk / Economic Releases

Country	GMT	Release / Event	Forecast	Previous
NZ	22:45	NZD Producer Prices- Inputs (QoQ) (2Q)		1.3%
NZ	22:45	NZD Producer Prices- Outputs (QoQ) (2Q)		1.8%
AUS	01:30(Thur)	AUD Average Weekly Wages (QoQ) (MAY)	1.2%	1.1%
AUS	01:30(Thur)	AUD Average Weekly Wages (YoY) (MAY)	5.6%	5.8%
NZ	03:00(Thur)	NZD ANZ Consumer Confidence Index AUG		115.6
NZ	03:00(Thur)	NZD Credit Card Spending SA (MoM) (JUL)		1.0%
NZ	03:00(Thur)	NZD Credit Card Spending (YoY) (JUL)		4.5%

Written by Alex Rodriguez, DailyFX Research Team
For questions or comments about this article, please e-mail arodriguez@fxcm.com

Japanese Economy Hurting, Australia and Hong Kong Riding Growth in Asian Markets

Asia Session Key Developments

• Japanese Stock Market Trading Weak on Stronger Yen, Concerns of Economy
• Hong Kong Land Sales Beat Expectations
• Australian Investors Indulging in Selective Buying at Lower Levels

Gloom on Global Economic Recovery Tempered by Mild Bargain Hunting in Asian Markets

Stocks in Asian Markets were mixed once again as Japan saw losses while Hong Kong and Australia continue to buck the disappointing economic data that keeps coming from the U.S. On Monday, China overtook Japan as the world’s 2^nd largest economy, and reports Tuesday showed that China’s leading economic index climbed 0.8% to 147.0 in June signaling that expansion is likely to remain intact even as the economy cools. The Chinese export market has been relatively soft, so it goes that the domestic market will have the most dynamic business opportunities in the second half of the year. Japan’s government will convene next Monday to discuss the yen’s recent gains, triggering “knee-jerk” selling of the yen as it weakened by 0.23% against the dollar. The meeting next Monday will also start the debate on what steps to take to stimulate the weakened Japanese economy, with lawmakers from the ruling party calling for “large-scale monetary easing.” The Australian market was well supported on Tuesday, outperforming Wall Street for the fourth consecutive day. With China and the rest of Asia on an apparent growth path, the Australian share market seems due for a significant gain.

Nikkei 225                        9161.68

Japanese stocks were down for the second day in a row dropping 34.99 points (0.38%) on continuing concerns of the Japanese economy following Monday’s GDP data. 8 out of the 10 components were down on the day with Oil & Gas slumping most dropping 1.79% (0% positive) while Telecommunications followed dropping 1.05% (50% positive). Japanese stocks closed at their lowest level in nearly 8 months as the dollar continues to hover near a 15-year low against the yen ahead of data from the U.S. and Europe. There is a lot of worry abound as the Nikkei continues heading towards the 9000 point support level and it may stick to the trend as the yen continues to gain strength. Toyota, the world’s biggest automaker, lost 0.7% to 3,005 yen, its lowest close since March 2007. TDK Corp., the world’s largest maker of magnetic heads for disk drives, slumped 1.3% to 4,490 as Tokyo Electron, 2^nd biggest maker of semiconductor equipment, slid 1.7% to 4,135 yen.

Hang Seng                        21137.43

The Hang Seng Index gained for the second day in a row  rising 25.31 points (0.12%)  on land auction sales beating analyst expectations. 7 out of the 9 components were up with Basic Materials leading the way rising 0.85% (50% positive) while Consumer Services and Consumer Goods lagged, dropping 0.12% (33% positive) and 0.52% (0% positive), respectively. Sino Land Co., the index’s worst performer on the Hang Seng’s property index this month, jumped 3.6% to HK$13.76, Cheung Kong rose 1.1% to HK$100.40 and SHK Properties rose 0.5% to HK$110.50. The index continues to rebound as companies pared losses from Monday following the government’s latest moves to ease surging real-estate prices.

S&P/ASX 200 Index         4477.00

The S&P/ASX 200 rebounded from Monday rising 38.50 points (0.87%) as investors looked for bargains on lower stock prices. 9 out of the 10 components were up on the day with Technology leading gains rising 3.68% (100% positive) followed by Industrials rising 1.89% (94% positive) while Oil & Gas slumped 0.11% (47% positive) after Monday’s gains. The Australian market is benefiting from the reporting season as its gotten investors interested again as companies continue to report expected or better than expected numbers. Market turnover was at a 2-week high and much of the movement came from the financials and materials sectors as the four major banks were standout performers along with BHP Billiton and rival Rio Tinto also posting modest gains on the day.  The National Australia Bank rose 1.65% to A$24.04 while Commonwealth Bank and Westpac advanced 1.51% (to A$50.50) and 1.29% (to A$22.76), respectively. Engineering and property services company UGL surged by 4.58% to A$14.40 after reporting it increased full-year profit 1.5% to A$144.5 million and announcing it would target underlying earnings growth of up to 15%.

Notable Asian Session Event Risk / Economic Releases

Country	GMT	Release / Event	Forecast	Previous
AUS	00:30(Wed)	AUD Westpac Leading Index (MoM) (JUN) (AUG)		0.2%
AUS	01:00(Wed)	AUD CBAHIA House Affordability (2Q)		118.8
AUS	01:00(Wed)	AUD DEWR Skilled Vacancies (MoM)AUG		0.3%
AUS	01:30(Wed)	AUD Wage Cost Index (QoQ) (2Q)	0.9%	0.9%
AUS	01:30(Wed)	AUD Wage Cost Index (YoY) (2Q)	3.1%	3.0%

Written by Alex Rodriguez, DailyFX Research Team
For questions or comments about this article, please e-mail arodriguez@fxcm.com

China Passes Japan to be World’s Second Largest Economy by GDP

Asia Session Key Developments

• Japan’s Economy Expands at Slowest Pace in 3 Quarters
• Hong Kong Announces Measures to Cool Home Prices
• Australian Market Down but Well Supported by Domestic Stocks

Asian Markets Close Mixed, China Overtakes Japan on Largest Economy List

Asian stocks mostly fell on Monday as Japan’s GDP grew by 1/5^th of economist’s expectations – pushing Japan into 3^rd place on the world’s largest economies list behind the U.S. and China – while Hong Kong’s government introduced measures to cool home prices. However, the Hang Seng was slightly up on the day, following the Shanghai Composite’s 2.1% increase (a product of China’s economic advance). Shares in Australia dropped as global economic recovery weighs on the index, though domestic companies proved resilient in limiting losses.  Japan’s export-heavy economy is suffering from the slumping global economic growth – as the reporting season continues, expect the Japanese market to move in the direction of the positive or negative results of economic reports abroad. Also, it remains to be seen how long the optimism on China’s domestic market will last given recent economic data reported by the country.

Nikkei 225                        9196.67

Japanese stocks were down on Monday dropping 56.79 points (0.61%) as the yen strengthened against the dollar. 6 out of the 10 components were down on the day with Oil & Gas slumping most dropping 2.53% (0% positive) while Technology trailed dropping 1.40% (0% positive). The Nikkei at this point has dropped 13% in 2010, the biggest slump among the world’s top-five largest developed markets, as the yen’s near-15 year high against the U.S. dollar continues to hurt earnings on exports. Europe’s debt crisis, China’s measures to curb property prices and the pace of the U.S.’s economic recovery have also dented confidence in a global recovery – really what Japan needs most to thrive. Sony lost 3% (to 2,535 yen), Honda dropped 0.9% (to 2,765 yen), Fanuc Ltd., maker of industrial robots with almost 80% of revenue coming from abroad, fell 1.9% (to 9,420 yen) and Canon Inc. dropped 0.7% (to 3,555 yen) – these are just a sample of export-dependent companies in Japan currently suffering.

Hang Seng                        21112.12

The Hang Seng Index gained on the day closed almost flat rising just 40.55 points (0.19%)  on speculation that domestic consumption will benefit from growth in China’s economy. 6 out of the 9 components were up with Telecommunications leading the way rising 1.37% (100% positive) while Industrials lagged, dropping 1.00% (57% positive).Hong Kong saw its GDP grow 6.5% year on year in the 2^nd quarter this year, a rise in 5 consecutive quarters – this is attributed to the economic recovery on the Chinese mainland as well as other Asian economies, whose recovery spur that of Hong Kong. Hong Kong stocks were very mixed on Monday as developers slumped after the city tightened mortgage-lending rules while shipping stocks gained along with freight rates.  Sino Land tumbled 5.3% (to HK$13.34) while Sun Hung Kai Properties Ltd., Hong Kong’s biggest developer, plunged 4% (to HK$110.10). China Cosco rose 4.6% (to HK$9.10) while Pacific Basin Shipping Ltd., Hong Kong’s largest operator of commodity vessels, rose 2.6% (to HK$5.59).

S&P/ASX 200 Index         4438.50

The S&P/ASX 200 lost on the day closing down 21.10 points (0.47%) as Wall Street ignored Friday’s gains in the Asian markets. However, 8 out of the 10 components were up on the day with Oil & Gas leading gains rising 3.44% (80% positive) followed by Consumer Goods rising 2.97% (100% positive). The domestic share market has proved its worth as good news continues to come through the reporting season as well as a reported gas discovery by Woodside Petroleum. Banks held the market down as Commonwealth Bank of Australia was down 3.4% (to A$49.75) after going ex-dividend while other major banks were down 0.1-0.9%. Macquarie Group fell 1.3% (to A$37.94). Newscrest Mining and Bluescope Steel both reported earnings slightly above expectations and issued strong outlook statements, as both rose 1.44% (to A$35.20) and 3.02% (to A$2.39), respectively. Industrials, consumer goods and energy stocks are supporting the Australian market as the global economic recovery remains uncertain.

Notable Asian Session Event Risk / Economic Releases

Country	GMT	Release / Event	Actual	Forecast	Previous
AUS	01:30(Tues)	AUD Reserve Bank Board August Minutes (AUG 16)

Written by Alex Rodriguez, DailyFX Research Team
For questions or comments about this article, please e-mail arodriguez@fxcm.com

Uncertainty Looms – China’s Slowed Growth, U.S. Economic Outlook Weighs on Asian Markets

Asia Session Key Developments

• Japan’s Domestic-demand Related Stocks lure Investors Away from Exporters
• Stocks in Hong Kong Drop Following City Government Plans to Stabilize Property Market
• Australian Market Rebounds Despite U.S. Losses

Earnings Reports across Region Boosts Investor Confidence

Today, investors trading in the Asian markets were encouraged after seeing positive earnings, re-igniting speculation that the global economy is getting back on the recovery track. While China’s Shanghai Composite Index gained, Hong Kong’s Hang Seng Index declined as the city’s government announced a plan to increase land supply to rein in home prices. The government also reported that Hong Kong’s economy expanded 6.5% in the second quarter, beating a survey of analyst estimates of 6.3% growth. Japanese stocks advanced after oil explorers gained along with higher crude prices slightly recovering from the previous 4 day’s losses – however, U.S. jobless claims reports continue to drag on the export-heavy Japanese economy. The Australian Market showed modest gains as investors sought out bargain buys following recent sharp declines. The mining sector led gains despite poor performers such as Telstra, though the slight gains posted today weren’t enough to continue the Australian market’s five consecutive weekly gains.

Nikkei 225                        9253.46

Japanese stocks were up for the first time in 5 days rising 40.87 points (0.44%) as Japanese profit reports beat expectations. 9 out of the 10 components were up on the day with Oil & Gas leading the pack rising 1.7% (67% positive) while Utilities was the sole negative dropping 0.18% (20% positive). Domestically oriented shares rose as they lured investors away from exporters as related stocks such as telecoms, insurers, retailers, and pharmaceuticals remain best bets for the near term – exporters continue to suffer following reports on the increase in U.S. jobless claims. Japan Petroleum Exploration Co. rose 1% to 3,405 yen and Showa Shell Sekiyu K.K., the oil refinery, rose 2.2% to 643 yen. Nipoon Telegraph & Telephone (NTT) rose 1.1% to 3,700 yen. Fast Retailing Co., which receives 83% of its sales domestically, rose 0.2% to 12,840 yen.

Hang Seng                        21071.57

The Hang Seng Index closed down for the fourth day in a row falling 34.14 points (0.16%) amid concerns in the properties market. The 4 out of the 9 components that were down on the day outweighed the gains in other sectors with Telecommunications dropping most at 1.55% (50% positive). Stocks on the Hang Seng reported mixed gains and losses as Banking giant HSBC fell 0.5% to HK$79.6 while major mainland lenders performed well such as ICBC (up 0.18% to HK$5.7), China’s largest bank by market value. China Life, one of the world’s largest life insurers by market value, slumped 0.45% to end at HK$33.45. PetroChina closed at HK$8.61 dropping 0.46% while Sinopec, China’s top refiner, gained 0.49% to close at HK$6.14.

S&P/ASX 200 Index         4459.60

The S&P/ASX 200 is up for the first time in 4 days rising 58.70 points (1.33%) despite losses on Wall Street. 8 out of the 10 components were up on the day with technology gaining 2.83% (100% positive) followed by basic materials rising by 2.38% (98% positive). The Australian market proved resilient after Wall Street posted losses for the 3^rd straight day, though the S&P/ASX 200 did close down 2.3% for the week, snapping a 5-week long streak of gains. Some of the biggest movers on the day were Newcrest Mining Ltd., the nation’s biggest gold producer, rising 2.5% to A$34.70 and Coca-Cola Amatil Ltd. gaining 2.1% to A$11.96. Telstra Corp. fell 0.7% to A$2.92 as Australia’s largest telephone company had its stock rating cut to “hold” from “buy” by analysts at Royal Bank of Scotland Group Plc. Other telecommunications shares dropped on speculation that Telstra may cut prices to take back market share as TPG Telecom Ltd. dropped 8.8% to A$1.45 and Iinet Ltd. plunged 8.5% to A$2.60.

Written by Alex Rodriguez, DailyFX Research Team
For questions or comments about this article, please e-mail arodriguez@fxcm.com

Asian Stocks Retreat as Global Growth Concern Continues to Rattle the Markets

Asia Session Key Developments

• Yen Declines Slightly but Not Enough, Nikkei Briefly Enters Bear Market
• China’s Slowing Growth Continues Drag on the Region’s Economy
• Australian Employment Growth slows, Higher Unemployment Decreases Value of A$

Global Economic Growth Concerns Continue to Fuel Losses in Region

The yen trading near a 15-year high against the dollar dragged the Japanese market briefly into a bear market as the currency threatens to diminish export earnings. Overnight heavy losses in the U.S. and European markets also factored in, as Tokyo stocks opened sharply lower beginning the day down 2%. The yen slightly weakened in the afternoon as Prime Minister Naoto Kan expressed concerns about the yen’s rise – the government will begin surveying export businesses on the effects of the strengthened yen. Stocks in Hong Kong did not fare better, also opening lower in response to overnight losses abroad. The index is poised for its biggest weekly loss since July 2^nd as it’s down for the third day in a row. China’s efforts to cool its property market and Europe’s debt crisis are denting confidence in a global economic recovery. Furthermore, industrial production in China – Australia’s largest trade partner – has expanded at the weakest pace in 11 months, indicating a weakness for Australia’s economy. The outlook in Australia is for now positive however, as Australia’s terms of trade – a measure of income from exports – are peaking to levels seen 2 years ago and the nation’s economic growth is likely to be “close to trend,” Governor Stevens reported last week.

Nikkei 225                        9212.59

Japanese stocks were down for the fourth day in a row falling 80.26 points (-0.86%) on Thursday as the yen’s strengthened value continues to hurt exports. 9 out of the 10 components were down on the day with Utilities being the sole positive, increasing 0.59% (80% positive). Exporters are a driving force in the world’s second-largest economy, accounting for 14% of the nation’s GDP – Nintendo Co. and Sony Corp., which get more than 70 percent of their sales from abroad, retreated 3.3% (to 22,390 yen) and 1.6% (to 2,564 yen), respectively. Citizens Holdings Co. dropped 6.5% (to 459 yen) as the watchmaker forecast annual net income of 6.5 billion yen ($76 million) missed analyst estimates. Japan Tobacco Inc. fell 2% (to 274,000 yen) as the world’s 3^rd-largest publicly traded cigarette maker reported that the percentage of Japanese who smoke fell to 23.9% in 2010 from 24.9% in 2009, citing survey results. Dentsu Inc., Japan’s largest advertising company, declined 3.6% (to 2,013 yen) after the company cut its full-year profit forecast by 10% to 22.8 billion yen.

Hang Seng                        21294.54

The Hang Seng index closed down for the third day in a row falling 188.83 points (0.89%) following banks as China Citic Bank Corp. announced a rights offer to replenish capital and Tencent Holdings Ltd. forecast slower growth. 7 of the 9 components on the index were down with technology slumping the most at a 3.52% (0% positive) decrease. Citic Bank, the banking unit of the nation’s largest investment firm, declined 2.7% (to HK$5.09) while Tencent, China’s biggest internet company by market value, slid 3.6% (to HK$143.30). There were some positives in the financial sector as the Bank of East Asia Ltd. climbed 2.6% (to HK$31.50) after reporting first-half profit jumped 78% to HK$2.08 billion ($268 million) on lower impairment charges and a one-time gain from the sale of its Canadian operations. Slowing growth in China remains a major concern but investors believe China is heading towards a soft landing due to tightened monetary policy – still, at current levels long funds are not ready to buy.

S&P/ASX 200 Index         4455.50

The S&P/ASX 200 is down for the third day in a row falling 54.60 points (1.23%) as concerns on the global recovery, especially with their largest trader China, continue to weigh in. 9 out of the 10 components were down led by telecommunications’ steep drop as it fell 8.61% (0% positive). Overnight, Wall Street’s S&P 500 fell 2.8% as a worsening trade imbalance added to concern about the U.S. economy after the Federal Reserve’s reported economic outlook from the previous day. Investors are beginning to question the domestic demand of China, Australia’s largest trade partner, but also think that the recent Chinese data is consistent with the government’s efforts to curb growth and bring their economy under control.  BHP Billiton Ltd. declined 0.9% to A$39.64 while Rio Tinto Group dropped 1.8% to A$69.82. Coca-cola Amatil Ltd. surged 4.2% to A$11.72 as Australia’s biggest soft-drink maker said profit rose on higher prices and demand for more profitable products. Commonwealth Bank of Australia dipped for the 3^rd day, losing 1% to A$50.70 as the nation’s biggest lender was downgraded to “neutral” from “outperform” at Credit Suisse Group AG. Telstra Corp. led the index losers, plunging 9.5% to A$2.94 after lower sales of fixed-line services cut profit at Australia’s biggest telephone company.

Notable Asian Session Event Risk / Economic Releases

Country	GMT	Release / Event	Actual	Forecast	Previous
AUS	01:00	AUD Consumer Inflation Expectation (AUG)	2.8%		3.3%
AUS	01:30	AUD Employment Change (JUL)	23.5K	20.0K	37.4K
AUS	01:30	AUD Full Time Employment Change (JUL)	-4.2K		12.2K
AUS	01:30	AUD Part Time Employment Change (JUL)oY%	27.7K		25.2K
AUS	01:30	AUD Participation Rate (JUL)	65.5%	65.2%	65.3%
AUS	01:30	AUD Unemployment Rate (JUL)	5.3%	5.1%	5.1%
JPN	05:00	JPY Consumer Confidence (JUL)	43.4	43.9	43.5

Written by Alex Rodriguez, DailyFX Research Team

For questions or comments about this article, please e-mail arodriguez@fxcm.com

Asian Markets Plunge on Weak FOMC Outlook, China’s Slowing Growth

Asia Session Key Developments

• Yen Strengthens, Japan Exports Suffer
• China’s Slowing Economy Threatens Growth Abroad
• Financials Down Across The Board in Australia

Asian Stocks Biggest Drop since June on Growth Concerns

Japan stocks were down after the country reported machine orders – an indicator of business investment for the next 3-6 months – at 1.6 percent growth, not coming close to the projected 5.4 percent. Japan’s exporters also dropped in value after the yen, which reduces overseas income as it strengthens, appreciated to as high as 85.19 against the dollar from 85.87 at yesterday’s close. Stocks on the Hang Seng continue to slip after yesterday’s reports from the Chinese customs bureau show that the economy is slowing as well as the warnings from the Federal Reserve of the U.S. concerning the global recovery. Investors in China also fear that the government will continue its tightening policies after the inflation rate jumped 3.3 percent. The Australian stock market fell after U.S. stocks dropped and oil and metals prices slipped overnight. The reporting season in the Asia/Pacific markets so far has been underwhelming, creating a cautious environment, all the while bigger markets continue releasing disappointing data – investors seem to be withdrawing money from the markets as they wait to be ready to buy again.

Nikkei 225                        9292.85″

Japanese stocks were down for the third day in a row falling 258.20 points (2.70 percent) on Wednesday as the yen’s appreciation continues to hurt exporters. All 10 components were down as a mere 5 stocks on the whole index gained – industrials and basic materials slipped the most falling 3.31 percent and 3.05 percent, respectively. Fanuc Ltd. lost 4.4 percent to 9,670 yen while Toyota Motor Corp., the world’s biggest automaker, retreated 1.8 percent to 3,020 yen. Canon Inc. sank 3.3 percent to 3,545 yen. Taiheiyo Cement Corp. and Pacific Metals Co. posted the biggest declines on the Nikkei after reporting results dropping 8.1 percent (to 114 yen) and 7.5 percent (to 615 yen), respectively. Investors continue to worry about the future of the U.S. economy, driving up the yen and increasing uncertainty about the prospects for Japanese earnings.

Hang Seng                        21294.54

The Hang Seng closed down 179.06 points (0.83 percent) on investor’s concerns that the Chinese government will continue to curb growth. 5 out of the 9 components were down; trading consumer goods was suspended for the second day while industrials, utilities, and telecommunications all gained slightly. Technology dragged the index down as it dropped 3.83 percent (0 percent positive) while industrials increased 1.71 percent (43 percent positive). The Chinese government ordered bad loan provisions be increased – ordering lenders to transfer off-balance-sheet loans on to their books – which decreased optimism that the nation has room to relax policies designed to rein in property prices and slow economic growth. China Construction Bank Corp. slipped 2.7 percent to lead declines among Chinese lenders. Hang Lung Properties Ltd., a developer that got 40 percent of its fiscal 2009 revenue from China, gained 1.4 percent. Hutchison Whampoa Ltd. jumped 6 percent after Managing Director Canning Fok bought more shares in the company. The market lacks direction in the short-term as the yuan inflates while the government continues its tight monetary policy.

S&P/ASX 200 Index         4455.50

The S&P/ASX 200 was down for the second day in a row by 85.20 points (1.88%) on financials weaker-than-expected profit reports. 8 out of 10 components were down on the day with financials dragging the index down most, falling 2.54 percent. Overnight falls on Wall Street combined with disappointing figures from Commonwealth Bank and Computershare pushed the Australian share market down to its lowest point in almost three weeks. Commonwealth Bank of Australia fell 3.0 percent to A$51.19 while Computershare fell 11 percent to A$8.94 as both reported that growth may falter in the coming months. On financials, even though the CBA reported profits and marginally raised its dividend, investors are weary that the bank continues to report tight funding costs, pressures on margins and ongoing global uncertainty. Materials also followed bearish trends from abroad, with BHP Billiton falling 1.8 percent to A$39.98 and Rio Tinto down 2.1 percent to A$71.09. Speculation on commodity prices continues to be bullish for the remainder of the year but the major factor – continuing demand from China – does have traders concerned.

Written by Alex Rodriguez, DailyFX Research Team
To submit questions or comments about this article, e-mail arodriguez@fxcm.com

Asia/Pacific Shares Fluctuate As Chinese Property Prices Slow, DPJ Losses Majority

Asia Session Key Developments

•    Hang Seng Index Rises to Two-Week High
•    Australian Home Loans Stalls in May
•    Japan’s Domestic Corporate Goods Price

Asia/Pacific Shares Fluctuate As China Property Prices Slow, DPJ Losses Majority

Nikkei 225                  9,548.11
Japanese equity markets pared Friday’s advance, leading the Nikkei 225 to shed 37.21 points (0.39 percent) and close at 9,548.11. Eight out of the ten components pushed lower on the day, with utilities leading the way, tumbling some 1.40 percent, while oil & gas added 1.64 percent to taper the decline. Shares of Mitsubishi Materials added 2.53 percent as the company was rated new “overweight” at JP Morgan, while Tokyo Gas lost 1.26 percent on the back of lower energy prices. Meanwhile, East Japan Retail slid 0.66 percent as the company was downgraded to “underweight” from “neutral” at JP Morgan.

Hang Seng                        20,467.43
The Hong Kong market advanced for a third consecutive day, leading the benchmark equity market to rally 88.77 points (0.44 percent) and close at 20,467.43. Six out of the nine components increased on the day, with basic materials adding 1.90 percent, and was followed by a 0.74 percent rise in telecommunications. Shares of China Overseas Land & Investment jumped 4.42 percent as property sales rose 7 percent for the six months through June 30th. On the other hand, PetroChina increased 0.57 percent after the company said it delayed startup of its Qinzhou oil refinery from June, while China Resources Land soared 2.19 percent as housing prices slowed in June, scaling back fears of a housing bubble in the world’s second largest economy.

S&P/ASX 200 Index    4,409.90
Shares in Australia rallied on the day, leading the S&P/ASX 200 to add 13.60 points (0.31 percent) and close at 4,409.90. Six out of the ten components pushed higher on the day, with basic materials leading the way, climbing some 1.15 percent, while industrials tumbled 0.45 percent. Going forward, the equity markets in Australia may continue to face headwinds as the global market remains uncertain due to the boiling debt crisis in Europe. However, bank stress tests measures due out by the ECB on July 23rd may provide some clarity as to the health of the European markets.

Asia/Pacific Shares Fluctuate Following G-20 Meeting in Canada

Asia Session Key Developments

•    Japan’s Retail Sales Disappoints in May
•    New Zealand’s Business Confidence Extends May’s Decline

Asia/Pacific Shares Fluctuate Following G-20 Meeting in Canada

Asia/Pacific shares were mixed on Monday following the G-20 meeting in Canada this past weekend. In Japan, retail sales fell for the first time this year as labor market conditions weaken. Figures fell 0.2 percent in May from the month prior, while the annualized rate rose 2.8 percent amid economists’ expectations for a 4.8 percent rise. Looking ahead, the expected slowdown in Europe later this year is likely to impact Japan as the nation sends approximately 9 percent of its exports to the region. Meanwhile, business confidence in New Zealand fell to 40.2 in June from 48.2 the previous month. Taking a closer look at the reading, figures posted the lowest level since December 2009. Going forward, we are likely to see consumers remain under pressure as the Reserve Bank of New Zealand continues to put upward pressure on interest rates,

Nikkei 225                  9,693.94
Japanese equity markets extended Friday’s decline, leading the Nikkei 225 to shed 43.54 points (0.45 percent) and close at 9,693.94. Seven out of the ten components pushed lower on the day, with oil & gas leading the way, tumbling 2.04 percent, while health care added 0.23 percent to taper the rally. Shares of Trend Micro lost 1.42 percent as the Nikkei English News reported that the company’s pretax profit for the six months through June, while CSK plunged 4.70 percent as consumers scale back spending amid uncertainty in the global market. Moreover, Inpex dropped 1.35 percent despite having its stock rating raised from “neutral” to “outer perform.”

Hang Seng                        20,726.68
The Hong Kong market pared Friday’s decline, leading the benchmark equity market to rally 35.89 points (0.17 percent) and close at 20,726.68. Five out of the nine components pushed higher on the day, with oil & gas leading way, increasing 1.36 percent, and was followed by 0.26 percent advancement in technology. Shares of China Unicom jumped 4.68 percent, marking a seventh month high on the back of recent talks that it will launch the iPhone4. Meanwhile, Aluminum Corporation of China increased 0.48 percent on the back of higher metal prices.

S&P/ASX 200 Index    4,384.50
Shares in Australia pushed lower for a fifth consecutive day, leading the S&P/ASX 200 to decrease 28.50 points (0.65 percent) and close at 4,384.50 as all ten components lost value on the day. Shares of Macquarie Group, Australia’s biggest investment bank dived 1.39 percent, marking its worst 5 – day slump following Morgan Stanley cutting its stock rating. On the other hand, BHP Billiton slid 0.80 percent on the back of lower energy prices.

Asia/Pacific Shares Mixed Following the Massive Drop in U.S. New Home Sales

Asia Session Key Developments

•    USDCNY Erases Yesterday’s Gains
•    U.S. New Home Sales Plunge 33 Percent

Asia/Pacific Shares Mixed Following the Massive Drop in U.S. New Home Sales

Asia/Pacific shares were mixed on Thursday subsequent to new home sales in the U.S. falling 33 percent, marking the largest fall since records began. Meanwhile, the economic docket was fairly quiet overnight, however, it is noteworthy  that major currencies pushed higher against the U.S. dollar as the FED stated that they hold rates for an extended period of time. Taking at a look at the recent decision by China to de peg its currency, the effect to reinstate confidence in the market  looks to have tapered off as risk aversion seems to have regain its footing in the markets today.

Nikkei 225                  9,928.34
Japanese equity markets pared yesterday’s decline, leading the Nikkei 225 to rally 4.64 points (0.05 percent) and close at 9,928.34. Six out of the ten components pushed higher on the day, with telecommunications leading the way, climbing 1.57 percent, while basic materials lost 0.57 percent. Shares of Toyota Motor lost 0.78 percent as the automaker is preparing to resume production at its factory in Guangzhou, China location. Meanwhile, Japan Steel Works rose 1.06 percent on the back of higher metal prices, while Chiba Bank rose 0.36 percent as the bank said it is likely to beat annual profit forecast this year.

Hang Seng                        20,733.49
The Hong Kong market pared yesterday’s advance, leading the benchmark equity market to slip 123.12 points (0.59 percent) and close at 20,733.49. Four out of the nine components dropped on the day, with basic materials leading the way, tumbling 1.55 percent, while technology added 1.11 percent. Shares of CNOOC retreated 1.51 percent as energy prices looked to have extended yesterday’s decline, while China Mobile slumped 0.44 percent as DBS Vickers cut the company’s rating from “buy” to “hold.”

S&P/ASX 200 Index    4,4479.70
Shares in Australia decreased for a second straight day, leading the S&P/ASX 200 to drop 6.40 points (0.14 percent) and close at 4,479.70. Half of the components pushed lower on the day, with technology leading the way, tumbling some 1.28 percent, while telecommunications jumped 1.56 percent. Shares of BHP  Billiton jumped 1.30 percent as the company alongside Rio Tinto financed a seven-week advertising campaign to end a mining tax in Australia, while Fortescue Metals rose 2.48 percent as metals continue their northern journey.

Written by Michael Wright, Currency Analyst
Questions? Email me at mwright@fxcm.com

Asian Shares Fail to Hold Onto Monday’s Gains

Asia Session Key Developments

•    New Zealand’s Credit Card Spending Shows Improvement
•    Japanese Supermarket Sales Slump in May
•    China’s Decision to De Peg Yuan Fails to Hold Confidence

Asian Shares Fail to Hold Onto Yesterday’s Gains

Asian shares pared yesterday’s rally in which China unleashed its yuan. However, investors digested this as  a political move. Additionally, comments from the European Central Bank reignited concerns over the sovereign debt.  Meanwhile, credit card spending in May increased, while Japanese supermarket sales slumped an annualized 5.3 percent in May.

Nikkei 225                  10,112.89
Japanese equity markets pushed lower on Tuesday after rising to its highest level since June 18th yesterday, leading the Nikkei 225 to slump 125.12 points (1.22 percent) and close at 10,112.89 as all ten components pushed lower on the day. Shares of Honda Motor lost 1.00 percent as a looser yuan raises the cost at plants in China’s Pearl River Delta, while NGK Insulators tumbled 1.54 percent following Credit Suisse lowering the company’s the company’s stock-price estimate from 1,600 yen to 1,350 yen. Moreover, Toyota slipped 0.61 percent lower as the automaker halted production at a car plant in Guangzhou.

Hang Seng                        20,819.08
The Hong Kong market pared yesterday’s rally, leading the benchmark equity index to slip 93.10 points (1.18 percent) and close at 20,819.08. Eight out of the nine components lost value on the day, with technology leading the way, dropping some 4.54 percent, while consumer goods added 1.59 percent to taper the selloff. Shares of PetroChina slid 0.65 percent on the back of lower energy prices, while Bank of Communications rose 0.22 percent after the bank successfully raised 17.13 billion yuan.

S&P/ASX 200 Index    4,558.34
Shares in Australia declined on the day, leading the S&P/ASX 200 to fall 54.26 points (1.18 percent) and close at 4,558.34 as all ten components tumbled on the day. Shares of Platinum Australia increased 0.64 percent on the back of higher metal prices, while Origin Energy lost 1.07 percent following announcements that the company may acquire Alinta Energy.

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