Yen weighs on Nikkei; Shanghai Composite on pace for record 11th day of gains
Most Asia-Pacific stock markets chalked up modest gains early Friday, following fresh records on major U.S. indexes, stemming two days of declines in the region.
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But a third straight big drop in Samsung and ongoing strength in the yen kept the main stock indexes in South Korea and Japan lower.
Korea's Kospi was recently down 0.1% as Samsung Electronics (005930.SE) fell another 2.6%. Since Tuesday's fourth-quarter update, the stock has skidded 9.7%, on pace for its worst week since May 2012.
Meanwhile, the Japanese currency has rallied the past three days after the Bank of Japan on Tuesday cut the size of ongoing purchases of government bonds for one bucket of longer-term debt. That set off talk that it could be a small step toward policy normalization. Tighter monetary policy often sends a currency's value higher relative to others.
Some investors have been reversing bets that the yen's value would fall as the Federal Reserve continues to raise interest rates, and the BoJ has been seen as being some time off in doing the same. The dollar is around Yen111.25, versus Yen111.80 when Tokyo stock trading ended Thursday.
The Nikkei was off 0.1% in early afternoon trading.
The WSJ Dollar Index finished Thursday at its lowest level in nearly four months, but if later Friday's consumer-price report provides "a hint of a stronger U.S. inflation...that might be the catalyst that the U.S. dollar needs for a turnaround," said Tim Kelleher, head of institutional sales at ASB Bank in New Zealand.
But Asian stocks rose in general Friday, after the region saw its first broad selling of the year the prior two days. Taiwan's Taiex led the way at 0.7% while Hong Kong's Hang Seng Index gained 0.5%. That index is looking to post a record-extending 14th straight gain Friday as it marches closer to 2007's record high.
Bright Smart Securities said southbound liquidity should continue to drive Hong Kong equities higher as long as nothing goes wrong in China-listed stocks.
Broadly, while "tracking the upbeat wave of sentiment" from Wall Street, don't expect a sizable rebound overall in Asia ahead of the weekend, said Stephen Innes, head of trading in Asia at Oanda.
Ric Spooner, chief market analyst at CMC Markets in Australia, didn't take Friday's gains as a total turnaround just yet. It needs to carry into next week for a rebound to be confirmed, he said. For now, the drop "shouldn't be looked at anything but a minor pullback."
Meanwhile, Chinese stocks were little changed Friday as trade data showed a much smaller than expected increase in imports last month. The Shanghai Composite Index , up 0.1%, is trying to post a record 11th consecutive gain.
U.S. oil futures fell 0.3% in Asian trading, reversing the gain seen during U.S. action. That advance put West Texas Intermediate up for a 15th day out of 19 and at fresh three-year highs.
(END) Dow Jones Newswires
January 11, 2018 23:26 ET (04:26 GMT)