Japan's Nikkei jumps on weaker yen
- Article by: PAMELA SAMPSON
- Associated Press
- February 12, 2013 - 3:10 AM
BANGKOK - Tokyo's Nikkei 225 led Asian stocks higher Tuesday as the yen weakened after a possible candidate for Bank of Japan governor voiced support for easier monetary policy. Investors shrugged off a nuclear test by North Korea.
The Nikkei, which was closed Monday for a public holiday, jumped 1.9 percent to close at 11,369.12 as the weaker yen boosted export stocks. South Korea's Kospi fell 0.3 percent to 1,945.79 while benchmarks in Indonesia, Thailand and India rose.
Markets in mainland China, Hong Kong, Singapore, Malaysia and Taiwan were closed for Lunar New Year holidays.
European stocks dropped in early trading. Britain's FTSE 100 fell 0.2 percent to 6,262.76. Germany's DAX lost 0.3 percent to 7,510.98. France's CAC-40 was 0.3 percent lower at 3,640.74. Wall Street could be headed for a day of losses: Dow Jones industrial futures fell 0.2 percent to 13,895 and S&P 500 futures shed 0.2 percent to 1,509.40.
The yen has dropped almost 8 percent against the dollar this year after Japan elected Prime Minister Shinzo Abe in December. Abe has been calling for Japan's central bank to ease monetary policy more aggressively to help spur economic growth.
Japan's central bank governor Masaaki Shirakawa, who has appeared at odds with Abe's views on monetary policy, is resigning next month, giving the government an opportunity to find a successor more sympathetic to its aims.
Asian Development Bank President Haruhiko Kuroda voiced support Monday for Abe's economic policies including the introduction of a 2 percent inflation target but kept mum about speculation he may become the next BOJ governor. In an interview with media organizations including Kyodo News, Kuroda said the BOJ's introduction of the target, proposed by Abe, was "epoch-making" and should be achieved "in about two years."
The Bank of Japan holds a two-day policy meeting starting Wednesday but analysts said no new initiatives were expected in light of the impending leadership change.
Markets, meanwhile, were unfazed by a nuclear test conducted by North Korea on Tuesday. Pyongyang said it successfully detonated a miniaturized nuclear device at a northeastern test site.
In Australia, the benchmark S&P/ASX 200 finished nearly unchanged at 4,959, with investors remaining tentative ahead of earnings reports due out this week from major companies including Rio Tinto Ltd. and Commonwealth Bank of Australia.
"It's a good chance to see if the rally we've had is actually justified," said Evan Lucas of IG Markets in Melbourne.
Among individual stocks, Nissan Motor Co. fell 3.8 percent in Tokyo. The company on Friday reported a 35 percent plunge in October-December profit as global sales languished.
Benchmark oil for March delivery was down 24 cents to $96.79 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.31 to finish at $97.03 a barrel in New York on Monday as the euro strengthened against the dollar.
In currencies, the dollar rose to 94.03 yen from 93.70 yen late Monday in New York. The euro fell to $1.3379 from $1.3389.
The euro has strengthened recently, raising concern it will hurt exports from the 17 euro countries. French President Francois Hollande has suggested the eurozone needs to manage its exchange rate. ECB President Mario Draghi indicated the bank does not seek any particular exchange rate, which is set by markets, but is monitoring the stronger euro's effect on inflation.
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