By Kenan Machado
Traders stayed in the brace position Wednesday as they awaited for an expected tightening message from the U.S. Federal Reserve, contributing to a mixed performance among Asian equities.
The Nikkei Stock Average /zigman2/quotes/210597971/delayed JP:NIK -0.87% rose 0.6%, moderating early gains made on the back of a weaker yen due to the U.S. dollar’s broad strength.
Australia’s S&P/ASX 200 /zigman2/quotes/210598100/delayed AU:XJO -0.61% added 0.1%, while the South Korean Kospi /zigman2/quotes/210598069/delayed KR:180721 -0.11% was down 0.3%. Hong Kong’s Hang Seng Index /zigman2/quotes/210598030/delayed HK:HSI -1.54% fell 1.2%, while the Shanghai Composite Index /zigman2/quotes/210598127/delayed CN:SHCOMP -0.83% edged down 0.1%.
The yen weakened in early Asian trade on Wednesday. However, the dollar-yen pair won’t likely move much until Federal Reserve Chairwoman Janet Yellen speaks Friday in Jackson Hole, said Mizuho Securities chief FX strategist Kengo Suzuki in a note.
The Japanese yen /zigman2/quotes/210561789/realtime/sampled USDJPY -0.0121% was nearly unchanged against the dollar in late evening Asian trade on Wednesday, according to Thomson Reuters.
Robert Levine, head of Asian sales trading at CLSA Ltd., doesn’t expect the Fed to raise interest rates this year. “There is still a lot of uncertainty in the world. You have elections coming up in November,” he said.
North Korea test fires missile from submarine
A North Korean submarine launched a missile that traveled some 300 miles, suggesting Pyongyang is improving its ability to threaten nearby countries with nuclear-tipped missiles. Photo: AP
Among stocks in Japan, Sony Corp. /zigman2/quotes/201361720/delayed JP:6758 -1.98% /zigman2/quotes/208567357/composite SNE +0.57% gained 2.2% after the Japanese electronics giant said it would raise the price of its PlayStation Plus service, weeks before unveiling two new versions of its flagship videogame console.
Japanese automobile stocks also rose as expectations that Fed tightening would push the dollar higher and the yen weaker, making Japanese exports more competitive. Toyota Motor Corp. /zigman2/quotes/203803129/delayed JP:7203 -0.27% /zigman2/quotes/200537742/composite TM +0.06% was up 2.1%, with Nissan Motor Co. Ltd. /zigman2/quotes/208298710/delayed JP:7201 -0.36% /zigman2/quotes/207656007/composite NSANY +1.98% trading 2.7% higher.
In Australia, Qantas Airways Ltd. /zigman2/quotes/205534063/delayed AU:QAN -0.57% pared handsome gains to close 1.5% higher after it reported record profit for the full fiscal year. The airline operator said it would pay an ordinary dividend of 7 Australian cents per share, its first such payment since 2009, and buy back shares worth A$366 million. Shares in the airline had fallen after Britain voted to leave the European Union in June. The Sydney to London route is one of Qantas’s most lucrative.
“Qantas remains very cheap…and the resumption of dividends demonstrates management’s confidence,” Macquarie said in a note Wednesday.
Meanwhile, shares in Malaysia’s AirAsia X Bhd. were down 12% in late trade Wednesday, even after one of the region’s biggest budget airlines reported first-half earnings that beat expectations. Analysts believe the stock is expensive; the share price is up 125% this year.
Oil prices were down in Asian trade Wednesday. West Texas Intermediate crude prices /zigman2/quotes/209726727/delayed CLV26 0.00% were down 90 cents at $47.20 a barrel in Asia trade, while Brent crude prices fell 82 cents to $49.13 a barrel, according to FutureSource.
In currency markets, the Malaysian ringgit /zigman2/quotes/210561817/realtime/sampled USDMYR +0.1641% gave up brief gains to trade weaker against the U.S. dollar in late Asian trade Wednesday. The currency is up 5.9% this year.
However, the ringgit has been pressured of late, along with other Asian currencies, on the view that the Fed is veering toward tightening. High U.S. interest rates would pull money out of Asian markets to the U.S., weakening regional currencies in the process.
The Indonesian rupiah /zigman2/quotes/210562008/realtime/sampled USDIDR +0.1733% was also trading 0.3% weaker to the dollar; it is up 4% this year.
Elsewhere in Asia, declines in property stocks weighed on shares in Hong Kong. Shares of Cheung Kong Property Holdings Ltd. /zigman2/quotes/209047637/delayed HK:1113 -0.43% fell 2.5%, while the Hong Kong-traded shares of mainland Chinese home builder China Vanke Co. /zigman2/quotes/205161363/delayed HK:1036 -1.44% dropped 1%.
—Hiroyuki Kachi, Kosaku Narioka, Jenny Hsu, Ewen Chew, Yantoultra Ngui and David Winning contributed to this article.