HONG KONG (MarketWatch) — Japanese stocks soared to finish at their best level in nearly three years on Friday, cheering a weaker yen, although most other regional markets dropped modestly on selling ahead of the weekend.
The Nikkei Stock Average /zigman2/quotes/210597971/delayed JP:NIK -3.34% was the best performer by far among regional benchmarks, jumping 2.9% to finish at 10,926.65 — a level it hasn’t seen since April 2010.
The rally came as the yen dropped sharply overnight — sending the dollar /zigman2/quotes/210561789/realtime/sampled USDJPY -0.0948% well above ¥90 and the euro /zigman2/quotes/210561215/realtime/sampled EURJPY -0.2163% over ¥121 — after Deputy Economy Minister Yasutoshi Nishimura told Bloomberg late Thursday that “the [dollar’s] current level around ¥90 can be said to be a correction in the strong yen, but it isn’t over yet.” Read: Yen blasted; dollar gains as jobless claims fall.
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“Traders have ... put new life into risk on the back of reports that Japan may look to invest in the EFSF (European Financial Stability Facility). At the same time, a senior Japanese official felt the [dollar-yen’s] parabolic move to 90 was a mere correction, and 100 was on the cards,” said Chris Weston, chief market strategist at IG Markets.
Shares of Hitachi Ltd. /zigman2/quotes/203839937/delayed JP:6501 -3.78% /zigman2/quotes/203416411/delayed HTHIF +2.28% jumped 5.5% and robot maker Fanuc Corp. /zigman2/quotes/202054799/delayed JP:6954 -3.34% /zigman2/quotes/206262686/delayed FANUF -0.63% climbed 4.8%.
Sony Corp. /zigman2/quotes/201361720/delayed JP:6758 -2.81% /zigman2/quotes/208567357/composite SNE -3.05% surged 8.5%, Nissan Motor Co. /zigman2/quotes/208298710/delayed JP:7201 -4.50% /zigman2/quotes/207656007/delayed NSANY -2.66% advanced 2.6% and NEC Corp. /zigman2/quotes/205173342/delayed JP:6701 -3.14% /zigman2/quotes/203814274/delayed NIPNF 0.00% rose 4.8%, after broadcaster NHK reported the three were considering an integration of their respective lithium-ion battery operations.
Dainippon Sumitomo Phama Co. /zigman2/quotes/206847121/delayed JP:4506 -4.15% /zigman2/quotes/208955724/delayed DNPUF -0.29% zoomed 11.5% higher after Kyodo News reported that the firm will start clinical trials in Japan on a drug designed to target cancer stem cells. Read: Dainippon Sumitomo to test new cancer drug: report.
Elsewhere in the region, Australia’s S&P/ASX 200 /zigman2/quotes/210598100/delayed AU:XJO -1.60% rose 0.4% for its eighth consecutive advance.
However, Hong Kong’s Hang Seng Index /zigman2/quotes/210598030/delayed HK:HSI +0.27% slipped 0.1%, Taiwan’s Taiex fell 0.3%, China’s Shanghai Composite /zigman2/quotes/206600939/delayed CN:000001 -1.25% declined 0.5% and South Korea’s Kospi /zigman2/quotes/210598069/delayed KR:180721 +1.18% slid 0.9%.
/zigman2/quotes/210598030/delayed HSI 26,893.23, +72.35, +0.27%
/zigman2/quotes/210598069/delayed 180721 2,103.61, +24.57, +1.18%
The performance handed a weekly gain of 0.1% to Japan’s Nikkei. Australia’s S&P/ASX 200 rose 1.3%, while the Kospi lost 2.1% and the Shanghai Composite shed 1.1% this week.
South Korean stocks have also been the worst performers among major Asian markets so far this year, with the Kospi dropping 2.5% as investors fretted about the impact of a more competitive Japanese export sector. Japanese stocks, meanwhile, gained 5.1%, Hong Kong equities rose 4.1% and Australian shares added 4%.
Friday’s mixed performance in Asia came after the Dow Jones Industrial Average ended up for a fifth straight session Thursday, while the S&P 500 briefly moved above the 1,500 mark. Read: Stocks feel the weight of Apple; Dow’s up.
Shane Oliver, head of investment strategy at AMP Capital Investors, said he saw more upside for the world’s stock markets, as global monetary conditions are “ultra-easy and getting even easier,” while valuations remain reasonable and equities are likely to benefit as investors switch out of low-yielding bonds.
Manufacturing surveys out from China, Europe and the U.S. on Thursday pointed to an improvement in the global economy, with the U.S. in particular seeing its strongest manufacturing expansion since March 2011.
Meanwhile, Hong Kong trading saw some weakness for the market’s biggest commodity-linked plays, with Aluminum Corp. of China Ltd. /zigman2/quotes/202960704/delayed HK:2600 -1.82% /zigman2/quotes/208051344/composite ACH -5.28% trading down 3.3% and PetroChina Co. /zigman2/quotes/204979431/delayed HK:857 -0.93% /zigman2/quotes/205108732/composite PTR -4.96% losing 0.5%.
On mainland Chinese bourses, property companies and financials were weighing the market, with China Vanke Co. /zigman2/quotes/205643772/delayed CN:000002 +1.49% losing 2.1% in Shenzhen, while Poly Real Estate Group Co. /zigman2/quotes/201864015/delayed CN:600048 +1.13% declined 3.6% and China Construction Bank Corp. /zigman2/quotes/208058581/delayed CN:601939 -1.04% /zigman2/quotes/207732534/delayed CICHY -3.19% slipped 1.1 in Shanghai.
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South Korean exporters felt the pain of yen weakness again on Friday, with Hyundai Motor Co. /zigman2/quotes/206684590/delayed KR:005380 0.00% /zigman2/quotes/204364212/delayed HYMTF -6.77% dropping 3.4%.
Kia Motors Corp. /zigman2/quotes/206019389/delayed KR:000270 -1.17% /zigman2/quotes/205439169/delayed KIMTF +8.21% lost 4.9% after reporting a 6.7% drop in fourth-quarter net profit to 737.5 billion won ($689 million), in part due to a stronger Korean currency. Read: Kia Motors’ Q4 net profit hurt by stronger won.
Samsung Electronics Co. /zigman2/quotes/209800866/delayed KR:005930 +1.94% /zigman2/quotes/202367843/delayed SSNLF 0.00% tumbled 2.5% after the firm reported a 76% rise in fourth-quarter net profit to a record-high 7.04 trillion won ($6.6 billion) amid strong smartphone sales. Still, the result missed analysts’ forecasts for a net profit of 7.3 trillion won. Read: Samsung Electronics posts record profit for Q4.
In Sydney, Karoon Gas Australia Ltd. /zigman2/quotes/205368474/delayed AU:KAR -3.94% surged 14.1% after the firm said that it had discovered oil off the Brazilian coast, although it cautioned about the find’s modest size. Read: Karoon Gas discovers oil off Brazil's coast.
Also behind Sydney’s advance Friday were gains from higher-dividend-paying stocks, including heavyweight telecom Telstra Ltd. /zigman2/quotes/201936124/delayed AU:TLS -2.96% /zigman2/quotes/202275272/delayed TTRAF -2.45% , which rose 0.4%, while banking group Westpac Banking Corp. /zigman2/quotes/203084975/delayed AU:WBC -1.65% /zigman2/quotes/210300378/delayed WEBNF +0.48% gained 1.7%.