MarketsAsian stocks pare gains as yen rally saps sentiment – Financial Times

This post was originally published on this site

Asian markets have begun to pare early gains, as a strengthening yen chips away at Japanese exporters and after the price of oil retreated.

Regional stocks spent much of the morning in positive territory, as Wall Street posted its biggest one-day rise in two months and oil prices jumped higher.

Japan’s broad Topix was flat and the Nikkei 225 was 0.2 per cent higher, having risen as much as 1.5 per cent shortly after the open. Those gains were whittled away as the yen reversed course and strengthened 0.5 per cent at ¥108.73, recouping a quarter of its declines over the previous two sessions.

Australia’s S&P/ASX 200 was up 0.5 per cent, while Hong Kong’s Hang Seng was down 0.9 per cent. On the Chinese mainland, the Shanghai Composite was off 0.1 per cent and the technology-focused Shenzhen Composite was down 0.3 per cent.

Oil prices also turned south, with Brent crude, the international benchmark, down 0.3 per cent at $45.38 a barrel, and West Texas Intermediate, the US marker, down a third of a percentage point at $44.51.

Brent rallied 4.3 per cent during Tuesday’s session, its biggest one-day gain since April 12, owing to concerns about supply disruptions in Nigeria where vandalism of oil infrastructure has reduced output to its lowest level in more than two decades, and disruptions caused by wildfires in Canada’s oil sands region.

That supported energy stocks on Wall Street on Tuesday, while financials on both sides of the Atlantic were given a boost after quarterly results from Credit Suisse were well-received by the market. The S&P 500 rose 1.3 per cent for its biggest one-day gain since March 11, and the Nasdaq Composite added 1.3 per cent.

The stronger yen weighed upon the US currency. The dollar index, a measure of the greenback against a basket of global peers, was 0.2 per cent weaker at 94.093, potentially spelling the end of a six-day winning streak for the greenback.

The recent strength in the dollar has generally weighed upon commodity prices, with the assets typically moving in opposite directions. Gold was 0.4 per cent higher on Wednesday at $1,270.27 an ounce.

Iron ore futures on China’s Dalian Commodity Exchange were on track for a seventh-straight day of declines, down 0.8 per cent in Wednesday trade.