Asia Closes Mixed with Weak Yen Boosting Japan Outlook

Most Asian markets ended slightly down Monday as Hong Kong fell ahead of a week full of earnings although Japanese stocks were helped by a weaker yen.

“The eventual bias is skewed downwards, as the recent market rally had priced in plenty of expectations for easing actions from both the U.S. and Europe, and further economic stimulus measures from China,” said Ben Kwong, chief operating officer at KGI Asia.

The dollar rose against a number of regional Asian currencies following data Friday showing improved U.S. consumer sentiment which lowered the chances of a new round of monetary stimulus. This prompted a continuation in the shift away from the region’s safe haven currency. At Y79.50, the dollar had stabilized against the yen, after gaining 1.7% against the Japanese currency last week.

The recent softening of the yen is still enough to lure investors back into Japanese equities, though the benefits diminished as the market was caught up in the region’s lackluster mood. The Nikkei ended up just 0.1% at 9171.16, as local exporters continued to climb. Canon was up 0.4% and Panasonic added 0.5%.

Hong Kong’s Hang Seng Index dropped less than 0.1% to 20,104.27 as investors started to get into position for a week that will be dominated by earnings reports. With more than 300 companies announcing results this week there could be plenty of volatility in individual stocks.

via WSJ

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza