Asian stock markets rise as Nikkei jumps after Japan intervenes to weaken yenBy AP
Tuesday, September 14, 2010
Japan leads Asia stocks higher on yen intervention
BANGKOK — Japan led Asian stock markets higher Wednesday, surging more than 2 percent after the government announced its first currency intervention to weaken the yen since 2004. European shares were lower.
The yen had been trading at 15-year highs against the dollar, battering Japan’s vital exporters and undermining an already fragile recovery in the world’s No. 3 economy.
Tokyo’s Nikkei 225 stock average jumped 217.25 points, or 2.3 percent, to 9,516.56, reversing course after posting light losses in the early morning. The dollar rose to 85.42 yen after earlier sinking as low as 82.27 yen.
Central banks from other major economies were not involved in the move to sell yen and buy dollars, causing some analysts to predict its effects would be fleeting without a coordinated global response.
“The effect from Japan’s solo intervention won’t last very long. We have to see how the U.S. and European monetary authorities would react,” said Yuji Kameoka, chief forex strategist at Daiwa Institute.
The intervention came a day after Prime Minister Naoto Kan held onto power after fending off a challenge from veteran lawmaker Ichiro Ozawa for the ruling party presidency. Ozawa had advocated currency intervention, but Kan had until now been reluctant to act.
A strong yen hurts exporters by reducing the value of repatriated profits and making their products less competitive abroad. Intervention sent the country’s big exporters broadly higher.
Toyota Motor Corp. climbed 3.8 percent and Sony Corp. jumped 4.1 percent in Tokyo trade.
Stock markets elsewhere in Asia were more muted while European markets were mostly down in early trading.
France’s CAC-40 was flat at 3,774.20, Britain’s FTSE 100 was off 0.1 percent at 5,563.54 and Germany’s DAX slipped 0.1 percent to 6,268.72. Wall Street was set for a flat open with Dow futures up 2 points, or less than 0.1 percent, at 10,466.00.
In Asia, Hong Kong’s Hang Seng index added 0.1 percent to 21,725.64, South Korea’s Kospi rose 0.5 percent to 1,823.88, and Australia’s S&P/ASX 200 added 0.8 percent to 4,661.50.
The Shanghai Composite Index retreated 1.3 percent to 2,652.50.
Wall Street fell Tuesday as worries returned about Europe’s economy.
The Dow dropped 17.64, or 0.2 percent, to close at 10,526.49 and the S&P 500 lost 0.8 point, or 0.1 percent, to end at 1,121.10. The Nasdaq edged up 4.06, or 0.2 percent, at 2,289.77.
Benchmark crude for October delivery was down 66 cents at $76.14 a barrel in electronic trading on the New York Mercantile Exchange.
In currencies, the euro fell to $1.2965 from $1.2990 late Tuesday in New York.
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