Published April 21, 2014
Asian shares were mixed Monday, with stocks in Tokyo rising again after a harsh selloff two weeks ago, as investors focus on upcoming earnings reports and U.S. President Barack Obama's visit to the region at a time of rising tensions.
The Nikkei Stock Average was up 0.8%, after gaining 4.0% last week. Taiwan shares were 0.1% lower and South Korea's KOSPI was down 0.3%, while the Philippines' benchmark was up 1.2%.
Some investors are hoping for progress in Trans-Pacific Partnership trade talks this week as Mr. Obama visits the region. That would be good for Japanese Prime Minister Shinzo Abe, who faces rising worries about the sustainability of Japan's economic revival.
Yet Mr. Obama's trip to Asia comes at a time of increasing diplomatic sparring between China and Japan, the region's two biggest economic powers. Over the weekend, the Shanghai Maritime Court seized a vessel owned by Japanese shipping giant Mitsui O.S.K. Lines over contract disputes dating to the second Sino-Japanese War, which began in the 1930s. Japan's top government spokesman said Monday that the seizure could hurt bilateral ties.
On Monday, Mr. Abe sent a ritual offering at the Yasukuni Shrine, seen by many as a symbol of Japan's militarist past. A number of convicted war criminals are enshrined there, and visits by Japanese prime ministers generally anger Beijing.
Still, the impact of the tensions on stocks appeared limited so far. Mitsui O.S.K. is down 0.8%.
In Japan, investors are also concerned about a sales tax increase that took effect this month and upcoming company earnings reports.
Also, data released Monday showed that Japan's trade deficit ballooned in March as imports surged and export growth remained subdued. Many economists expect consumption to slow after the nation's sales tax rose on April 1.
Big Japanese companies will start reporting their earnings later this week for the fiscal year ended in March, and offer earnings guidance for the new year. Some investors are wary.
"It's difficult to project an impact from the consumption tax increase. Companies are likely to report conservative guidance," said Shigeo Sugawara, senior investment officer at Sompo Japan Nipponkoa Asset Management. "As their results come out, stock markets are likely to return to reflect a recovery, but right now concerns are leading the trading."
Among individual movers, Japanese consumer-focused lenders are higher following a report that the ruling Liberal Democratic Party is considering loosening restrictions on money lenders to make it easier for smaller businesses shunned by banks. Credit Saison is up 1.7% at Yen2,267.
In China, concerns continued over the pace of economic growth, weighing on stocks. Shanghai Composite Index was 0.1% lower.
"Investors remain conservative due to concerns about a share glut from upcoming IPOs, as well as from the slowdown in the economy," said Deng Wenyuan, an analyst at Soochow Securities.
Markets in Australia, Hong Kong and New Zealand were closed for the Easter holiday.
Other must-read MarketWatch stories include:
Asia Stocks blog: Japan trade deficit swells
Long view is best on stocks during weak earnings season
Home sales getting crimped by more than just bad weather