Euro climbs along with oil as Japan stocks decline

Seoul - The euro spiked higher as the dollar weakened for a second day and oil advanced in thin end-of-year trading. Japan’s Topix index capped its first annual loss since 2011, while Hong Kong shares rallied.

The Bloomberg Dollar Spot Index shifted lower after reaching the highest level in more than a decade earlier this week.

Japan’s benchmark index ended lower for the year, despite a second-half rally, while Hong Kong shares turned positive for 2016.

Oil was set for its first annual advance in three years.

The S&P 500 Index ended little changed on Thursday following the announcement of new American sanctions against Russia over election hacks.

Trading has been thin across the globe during the last week of the year, with volumes in crude oil, equities and currencies all below average.

Investors may be reallocating money as they assess asset moves in the wake of the US election that took the dollar to multi-year highs, sent Treasuries tumbling and spurred a rally in American equities.

"Asian markets could see another day of mixed performances on the final trading day of the year with little inspiration for price direction," said Jingyi Pan, a market strategist at IG Asia.

"The market is likely to be re-positioning for the New Year with US markets and that could place some pressure on markets that have underperformed lately."

Currencies

The euro rallied as much as 1.6% before paring its advance to 0.5% and trading at $1.0541 as of 3:08 in Tokyo. The yen fell 0.1% to 116.70 per dollar, erasing an earlier advance of 0.4%

The currency was up more than 20% for the year in August, but has pared that to 3.2%.

The Bloomberg Dollar Spot Index slipped 0.2% after dropping 0.5% on Thursday, although it remains up 2.9% for the year.

Stocks

The MSCI Asia Pacific Index rose 0.2%, heading for a 2.4% advance for the year, its first annual gain since 2013. Pakistan was the region’s best market in 2016, jumping 45%, while China was set for the worst performance.

Japan’s Topix closed little changed, ending 2016 with a loss of 1.9%.

The Nikkei 225 index declined for a third day. India’s S&P BSE Sensex added 1% in a second day of gains, set for a 1.9% climb this year.

Australia’s S&P/ASX 200 Index dropped 0.6%, paring its annual gain to 7%, while New Zealand’s S&P/NZX 50 pared its increase for the year to 8.8%. South Korea is closed for a holiday.

The Kospi Index finished on Thursday with a 3.3% advance for 2016. Hong Kong’s Hang Seng Index rose 1.2%, wiping out its losses for the year.

The Shanghai Composite Index added 0.1%, paring its yearly decline to 12.4%. The Hang Seng China Enterprises Index jumped 1.2%, trimming its annual loss to 2.5%.

The S&P 500 fell less than one point to 2 249.26 on Thursday, the lowest close since December 8.

It is up 10% for the year. The Dow Jones Industrial Average slipped to 19 819.78, maintaining a 14% advance this year.

The Stoxx Europe 600 Index lost 0.4% after closing on Wednesday at the highest level in a year. The gauge is down 1.5% for 2016.

Commodities

Crude futures gained 0.3% to $53.95 a barrel, after Thursday’s 0.5% decline. Prices are up about 45% this year. Supply cuts from OPEC and other producing nations next month are intended to stabilize the market and reduce swelling global inventories.

Gold rose for a fifth session on Friday, adding 0.3% to $1 161.09 an ounce.

The metal has rebounded 2.8% from an 11-month low, and is up more than 9% for the year.

Bonds

The yield on 10-year Treasury notes was little changed at 2.47% after dropping three basis points on Thursday. It slid to 2.46% earlier in the week, the lowest since December 14.

The equivalent Australian yield was down one basis point at 2.77%, while the yield on similar New Zealand notes dropped five basis points to 3.33%.