A drop in oil prices weighed on Asia stocks on Thursday, ahead of inflation, jobs and exports data expected from the U.S. and testimony from Federal Reserve Chairwoman Janet Yellen on the economic outlook to Congress later in the day.
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Australia's S&P/ASX 200 closed up 0.2%, recovering from early losses with BHP Billiton bouncing back 0.3% and Rio Tinto gaining 1.1%. However, Woodside Petroleum lost 1.6% with oil and energy firm Santos fell 2.7%.
"The strengthening U.S. dollar is buffeting commodity prices," said Michael McCarthy, chief market strategist at CMC Markets in Sydney. Stock market declines in the U.S. and Europe also weighed on equities in Asia, he said.
The dollar touched a 13-year high on Wednesday, boosted by rising U.S. bond yields. The ICE Dollar Index, which tracks the greenback against a basket of six currencies, rose to 100.57 earlier in the session, its highest level since April 2003. It was last trading 0.2% down at 100.23.
Crude prices fell after data showed U.S. crude oil inventories in the country were higher than expected. Brent crude, the international benchmark, was last trading down 0.2% at $46.53 a barrel.
The data overshadowed comments from Russian Energy Minister Alexander Novak who told reporters at a Moscow energy forum that Russia would "support any decision" adopted by the Organization of the Petroleum Exporting Countries. Crude prices surged nearly 6% Tuesday on news that OPEC would try to limit production ahead of a meeting in Vienna.
In Japan, the Nikkei Stock Average closed flat even as the yen slipped 0.3% against the dollar.
Bank of Japan Governor Haruhiko Kuroda said on Thursday that he would hold down yields in Japan ahead of a likely rate-increase cycle in the U.S.
"Interest rates may have risen in the U.S., but that doesn't mean that we have to automatically allow Japanese interest rates to increase in tandem," he said in parliament.
The remark came within an hour of an announcement by the BOJ that it was prepared to buy an unlimited amount of certain government bonds at fixed rates, to bring down yields. The tactic worked: yields on two-year and five-year Japanese government bonds fell on Thursday after the BOJ's announcement. The 10-year yield also briefly fell to 0.010% after hitting as high as 0.025% earlier in the morning.
Korea's Kospi and the Shanghai Composite each gained 0.1% while Hong Kong's Hang Seng Index was down 0.4%.
"The market is getting back to normal after people were overconcerned about the elections," said Arthur Kwong, head of equities for Asia at BNP Paribas Investment Partners. "[Investor] behaviour will be now be correlated to fundamentals."
Elsewhere in the region, the Philippines' third-quarter gross domestic product came in at 7.1% on year, surprising economists for its strength. The benchmark stock index, the PSEi, was 1.2% higher.
The Malaysian ringgit fell 1% Thursday on talk of enhanced controls by the Malaysian central bank on trading the currency offshore. Thomson Reuters reported Wednesday, citing banking sources, that Bank Negara Malaysia has asked foreign banks to make a written commitment to refrain from trading the ringgit in the offshore nondeliverable-forwards market. The central bank denied the report.
Later in the U.S. on Thursday, data on October consumer prices, weekly jobless claims and export sales are due. But the market will be focused on congressional testimony from U.S. Federal Reserve Chairwoman Janet Yellen. New York Fed President William Dudley and Fed Board Governor Lael Brainard will also be speaking at public events.