SHANGHAI: Asia markets traded higher on Wednesday morning after a rise in oil prices powered gains in U.S. equities overnight and China trade data showed exports climbed in March.
Australia’s ASX 200 was up 1.26 percent, boosted by advances in the heavily-weighted financials subindex, up 1.34 percent. The energy and materials subindexes were also up 2.81 and 2.76 percent respectively.
Chinese mainland markets also advanced, with the Shanghai composite up 2.02 percent and the Shenzhen composite higher by 1.83 percent. In Hong Kong, the Hang Seng index advanced 2.06 percent.
In Japan, the Nikkei 225 advanced 2.53 percent, buoyed by relative weakness in the yen against the dollar. The dollar/yen pair traded at 108.84 as of 10:04 a.m. HK/SIN time, advancing from 108.53 in the previous session.
Major Japanese exporters were mostly higher, with shares of Toyota up 2.08 percent, Nissan rising 2.78 percent and Honda adding 2.61 percent. Shares of Sony declined 0.36 percent.
A weaker yen is a positive for exporters as it increases their overseas profit when converted into local currency.
Stephen Innes, a senior foreign exchange trader at OANDA, said in a note that the recent slowdown in yen appreciation is not too unexpected. “Airwaves [are] running thick with intervention chatter and event risk premiums are skyrocketing, as traders debate what’s next for the Bank of Japan,” he said.
Innes added the Japanese central bank needs to step up their game, but said, “given the market’s apparent lack of confidence in any BOJ policy, market price momentum continues to favor a move to 105 as the overwhelming percentage of traders continue to advocate dollar/yen from the short side.”
Markets are likely to get additional boost for the rest of the session, following a rebound in China’s trade data.
Data released by China’s General Administration of Customs showed the country’s dollar-denominated exports for March increased 11.5 percent on-year, compared with a Reuters poll forecasting a 2.5 percent increase. The dollar-denominated imports for the same month fell 13.8 percent on-year, wider than the 10.2 percent drop forecast in a poll, reported Reuters.
Chinese imports of iron ore also rose 6.5 percent in the first quarter of the year, according to Reuters, ahead of the release of official commodity import and export data for March.
Mining stocks have been broadly positive during Asia hours, with Australia miners advancing on the back of higher base metal prices overnight. Shares of major miners Rio Tinto, Fortescue and BHP Billiton advanced between 2.7 and 4 percent.
Three month copper prices on the London Metal Exchange rose 2.2 percent overnight, Aluminum climbed 1.7 percent and zinc advanced 4 percent, initially supported by a relatively softer dollar, according to Reuters.
Iron ore prices advanced more than 4.6 percent, climbing from $55.90 on Monday to $58.50 overnight.
Chinese metal plays also advanced, with shares of Baoshan Steel gaining 3.55 percent, Yunnan Copper higher by 8.68 percent and Aluminium Corp. up 3.96 percent.
In company news, shares of Nomura reversed losses of over 1 percent to trade up 1.25 percent. In the previous session, shares climbed 7.43 percent after reports during market hours on Tuesday said the Japanese bank will restructure its business in Europe and the Americas, closing some operations in Europe.
The Australian dollar advanced to $0.7707 following the release of the Chinese trade data, compared with around $0.7680 before the release. China is a key export market for Australia’s resources.
Overnight, the Aussie had gotten a boost from around $0.7660 in Asia trade Tuesday, with analysts attributing the rise to higher oil prices and improvement in risk appetite.
Oil prices retreated during Asian hours, after advancing more than 4 percent overnight. Global benchmark Brent futures were down 0.49 percent at $44.47 a barrel, while U.S. crude fell 0.74 percent to $41.86.
Energy plays in Asia mostly shrugged off the retreat in oil prices and traded higher, with Santos advancing 3.69 percent, Woodside Petroleum up 3.79 percent and Inpex up 4.32 percent. Mainland Chinese energy stocks were also higher, with China Petroleum advancing 2.83 percent.
Major U.S. indexes closed up overnight, with the Dow Jones industrial average adding 0.94 percent, the S&P 500 up 0.97 percent and the Nasdaq composite higher by 0.8 percent.
Markets in South Korea and Thailand are closed today.
