TOKYO: Most Asia markets traded higher Thursday morning, after U.S. stocks rose overnight, helped by gains in financial stocks.
Australia’s ASX 200 was up 0.76 percent, boosted by a 0.99 percent advance in the heavily-weighted financials sub-index. The country’s so-called Big Four banks – ANZ, Commonwealth Bank of Australia, Westpac and NAB – traded up between 1.14 and 1.72 percent.
Japan’s Nikkei 225 was up 2.45 percent, extending gains on the back of the yen’s recent, relative weakness against the dollar. South Korea’s Kospi returned to trade after being closed on Wednesday, rising 1.13 percent in morning trade. In Hong Kong, the Hang Seng index gained 0.87 percent.
Chinese markets stumbled, with the Shanghai composite edging up 0.1 percent and the Shenzhen composite ekeing out a 0.1 percent gain.
Rodrigo Catril, a currency strategist at the National Australia Bank, said in a morning note that risky assets have continued to benefit from an improvement in sentiment.
“Bank stocks have led the surge in equity markets [overnight] and most commodities have also enjoyed some gains, despite of a pullback in oil prices. The dollar is broadly stronger with safe haven currencies the underperformers,” Catril said.
In Singapore, the Straits Times index added 0.8 percent, following the release of its growth numbers for the January-March period. The city-state’s gross domestic product (GDP) expanded 1.8 percent on-year during the January-March period, the same as the previous quarter and slightly above the 1.7 percent forecast in a Reuters poll. On an on-quarter basis, GDP was flat, as expected.
At the same time, the Monetary Authority of Singapore surprised markets by easing its currency policy. The central bank, which uses exchange rates to guide policy instead of interest rates, set the rate of appreciation of the Singapore dollar’s trading band based on a basket of currencies, called the Singapore dollar nominal effective exchange rate (S$NEER), at zero percent.
The Singapore dollar weakened sharply after the release, with the U.S. dollar fetching 1.3610 Singapore dollars as of 10:28 a.m. HK/SIN time, compared with around 1.350 Singapore dollars before the release.
In the currency market, the Japanese yen retreated to the 109 handle against the dollar, on the back of fresh dollar strength. The dollar/yen pair traded at 109.39 as of 10:20 a.m. HK/SIN time, compared with levels under 109 during the Asia session Wednesday.
Japanese exporters traded mostly higher, with shares of automakers Toyota, Nissan and Honda advancing between 1.36 and 2.21 percent. Shares of Sony, on the other hand, extended losses from the previous session, down 0.10 percent in the morning.
Elsewhere, the Australian dollar traded at $0.7641 Thursday morning Asia time, after trading in a narrow range overnight, according to Catril.
Some analysts questioned the dollar’s strength against all major currencies overnight, which followed weak U.S. retail sales numbers. The dollar index, which measures the dollar against a basket of currencies, traded up 0.2 percent at 94.93. In recent sessions, the index had slipped as low as to the 93 handle before trading higher.
Kathy Lien, managing director of foreign exchange strategy for BK Asset Management, wrote in a note that the dollar’s strength “in the face of exceptionally weak retail sales numbers has many investors wondering if the currency has bottomed.”
“When the dollar moves higher despite such an abysmal report, market participants start to wonder if the softness of the U.S. economy has been completely priced in and that the dollar’s downtrend is finally over,” Lien said.
Oil prices retreated during Asian hours, with global benchmark Brent down 0.95 percent to $43.76 a barrel, while U.S. crude slipped 0.96 percent to $41.36.
Overnight, Reuters reported Russian oil minister Alexander Novak told a closed-door briefing that a deal on an oil output freeze later this month at Doha will be loosely framed with few detailed commitments.
Major U.S. indexes closed up overnight, with the Dow Jones industrial average adding 1.06 percent, the S&P 500 up 1 percent and the Nasdaq composite rising by 1.55 percent.
On the data front, Australia’s March employment numbers are due.