TOKYO: Asian stocks rose on the first trading day of the new year, while the US dollar index increased to a fresh nine-year high.
Hong Kong’s Hang Seng Index has gained 0.8 per cent on Friday, led by the energy and financial sectors. Australia’s S&P/ASX 200 rose 0.4 per cent, with nearly all sectors gaining.
Trading was light as many investors will remain on holiday until the first full week of the year. Markets were also closed in Tokyo, China, Taiwan, Thailand, the Philippines and New Zealand.
The mood was generally upbeat across the region. Even Indonesia’s Jakarta Composite rose 0.3 per cent, in spite of new data showing that November exports fell nearly 15 per cent from a year ago, the worst annual reading since August 2012. Economists were only anticipating a 4.5 per cent decline, after a 2.2 per cent contraction in October.
Indonesia’s imports for November also disappointed, falling 7.3 per cent from a year ago — the biggest contraction since July.
Fuel prices likely played a key role in both sides of the equation. President Joko Widodo reduced fuel subsidies in mid-November, causing petrol prices to rise more than 30 per cent. That lifted input prices for companies and reduced consumers’ potential for discretionary spending.
The Central Statistics Agency also said Indonesia’s consumer price index rose at a yearly rate of 8.36 per cent in December, the highest reading in five years.
After the data were released, President Joko Widodo said the economic outlook for 2015 was better than last year, according to Bloomberg. He said the government would have the fiscal space to help the economy and boost infrastructure spending.
Economists at Nomura said Wednesday’s decision to scrap petrol subsidies entirely should “permanently reduce fiscal risks and yield substantial savings to finance more productive public spending”.
In currency markets, the strength of the US dollar continued to be the dominant theme.
The US dollar index, which measures the US currency against key rivals, rose 0.3 per cent in the Asian session to 90.56, a fresh nine-year high. The dollar index rose 12.8 per cent in 2014 — its best year since 1997 — as investors who were expecting interest rates to rise piled into the greenback.
The Australian and New Zealand currencies each fell more than 0.6 per cent, a day after new data showed China’s manufacturing sector in Decmber expanded at its slowest pace in 18 months. The state-sponsored purchasing managers’ index was 50.1 last month, slowing from 50.3 in November.
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