Falling yen lifts Japan stocks; eyes on China data

TOKYO Thu Nov 22, 2012 6:29am IST

A Tokyo Stock Exchange employee looks up at a monitor displaying market indices at the bourse in Tokyo November 5, 2012. REUTERS/Issei Kato

A Tokyo Stock Exchange employee looks up at a monitor displaying market indices at the bourse in Tokyo November 5, 2012.

Credit: Reuters/Issei Kato

Related Topics

Stocks

   

TOKYO (Reuters) - The yen fell to a 7-1/2-month low versus the dollar on Thursday, lifting Japan's Nikkei share average to a six-month high, on mounting expectations of aggressive policy action under a likely new government.

Asian stocks outside Japan were also in demand and investors will focus on HSBC China flash PMI for November due later on Thursday to see whether a low point for China, the world's second largest economy, is over.

The Japanese currency fell to 82.535 yen to the dollar and has fallen around 4 percent in the last 1-1/2 weeks. The yen is expected to continue to be under pressure ahead of the December6 Japan election.

Shinzo Abe, leader of the main opposition Liberal Democratic Party, who is expected to win the election, has called for more extreme measures from the Bank of Japan bank to pull the export-reliant economy out of deflation.

"The dollar/yen continues its break higher and the Korean won is the star in this move. Post Japanese elections, the reality of trying to pass a new BOJ law and the risk for the JGB market are likely to tamper the hype, until then we can still move higher," Societe Generale analysts said in a note.

"Hedge funds and the likes need this year end run to round up what has been a difficult year."

Tokyo's Nikkei average rallied 1.3 percent to its highest level since May 2, while MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.5 percent and Australian shares advanced 1 percent.

The won scaled a 16-month high against the Japanese currency and South Korean shares gained 0.5 percent.

Overnight, U.S. stocks ended modestly higher but volume was one of the year's lowest on the day ahead of the U.S. Thanksgiving holiday.

U.S. manufacturing grew in November at its quickest pace in five months, with a rise in domestic demand hinting that factories could provide a boost to economic growth in the fourth quarter, while those from Europe are due out later on Thursday.

HIGH HOPES

European shares rose for a third straight session as investors positioned for a positive outcome to negotiations over aid to Greece after German Chancellor Angela Merkel said a deal to release emergency aid to Greece was still possible next Monday when euro ministers meet.

The expectations of a Greek deal helped the euro rebound to a two-week high against the dollar, after being initially sold off after international lenders to Greece failed to reach a deal to release the aid.

The single currency was up 0.2 percent versus the greenback at $1.28590, and climbed to a near seven-month high of 106.27 yen, bringing into view the April high of 108.00.

"Efforts to avert a Greek default may provide short-term relief for the euro, but the measures will only help to buy more time as Greece persistently seeks further external assistance," said David Song, currency analyst at DailyFX, who is maintaining a bearish view on the single currency.

(Additional reporting by Ian Chua in Sydney; Editing by Michael Perry)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Shares Hit Record

Sensex, Nifty rise to second consecutive record high

Sensex surges 500 points on BOJ easing, L&T gains

The BSE Sensex and Nifty surged to record highs for a second consecutive session on Friday after Bank of Japan's surprise expansion of its massive stimulus programme raised hopes for additional foreign inflows, boosting blue-chips such as Larsen & Toubro.  Full Article 

REUTERS SHOWCASE

Indian Economy

Indian Economy

India's fiscal deficit in H1 almost 83 pct of full-year target.  Full Article 

M&M Earnings

M&M Earnings

M&M Q2 net profit down 4 percent, hit by poor monsoon.  Full Article 

Ban on E-Cigs?

Ban on E-Cigs?

Govt considers ban on e-cigarettes, sale of single smokes.  Full Article 

Commodities

Commodities

Silver futures in India hit four-year low on global cues.  Full Article 

BOJ Policy

BOJ Policy

BOJ shocks markets with surprise easing as inflation slows.  Full Article 

Shadow Banking

Shadow Banking

China's shadow banking sector growing rapidly, third largest in world - FSB.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage