Asia stocks end week with rally, dollar takes breather
HONG KONG, Nov 25 — Asian markets headed into the weekend on a positive note today, with Tokyo again propelled by the weaker yen but the dollar edged back slightly in the afternoon following its recent surge against global currencies.
With traders confident the Federal Reserve will hike interest rates before Christmas, the dollar is cruising along, hitting record highs against India’s rupee and the Turkish lira and touching multi-month highs elsewhere.
The advance has come hand in hand with a rally across world markets since Donald Trump’s shock election win, with dealers expecting his big-spending, high tax plans will give a boost to the world’s top economy.
However, there are some concerns inside emerging-market governments about his campaign pledge to review global trade deals, which could lead to an era of protectionism and throw up huge US tariffs.
“There’s this anticipation of the US raising rates that is a positive signal that the US economy is strong and that’ll keep pushing additional inflows into the dollar,” Niv Dagan, executive director at Peak Asset Management LLC, told Bloomberg News.
“The fact that there are outflows out of emerging markets, like the Philippines, places a lot of pressure on their equity markets and we’ll continue to see that stronger dollar as a negative.”
In Asian morning trade the dollar flirted with the ¥114 mark for the first time since March, providing more support for Japan’s exporters, before it eased back slightly.
The Nikkei came off earlier highs but ended 0.3 per cent up, its seventh straight win.
Another weak reading on Japanese consumer prices meant any monetary tightening by the central bank was unlikely in the foreseeable future.
The greenback dipped slightly against many other currencies, although it still remains elevated.
Among regional currencies, South Korea’s won, the Indonesian rupiah, Malaysia’s ringgit and the Thai baht were all stronger but still sitting near multi-month lows as traders drag their cash out to seek better returns in the US.
Nicholas Teo, a strategist at KGI Fraser Securities in Singapore, said: “The dollar has been really strong in anticipation of Yellen’s move next month and that strength in the US dollar is ultimately going to mean that emerging market assets would be seen as disadvantaged.”
In other stock markets, Hong Kong and Sydney were up 0.4 per cent, Shanghai gained 0.1 per cent and Seoul put on 0.2 per cent while Singapore jumped 0.8 per cent. There were also big gains in Wellington, Taipei, and Jakarta.
Key figures around 0600 GMT (2pm Malaysian time)
Tokyo – Nikkei 225: UP 0.3 per cent at 18,381.22 (close)
Hong Kong – Hang Seng: UP 0.4 per cent at 22,701.10
Shanghai – Composite: UP 0.1 per cent at 3,243.57
Euro/dollar: DOWN at US$1.0570 from US$1.0574 yesterday
Dollar/yen: UP at ¥113.35 from ¥113.20
Pound/dollar: DOWN at US$1.2449 from US$1.2464
Oil – West Texas Intermediate: DOWN 32 cents at US$47.64 a barrel
Oil – Brent North Sea: DOWN 43 cents at US$48.57
London – FTSE 100: UP 0.2 per cent at 6,829.20 points (close)
New York – Dow: UP 0.3 per cent at 19,083.18 (Wednesday’s close) — AFP