Asia shares mixed, rising yen hurts Tokyo

2013-01-16 07:57

Hong Kong - Asian shares were mixed on Wednesday as hopes for improved growth figures from China this week and upbeat US retail data were offset by losses in Tokyo as the yen rebounded.

Japan's two biggest airlines grounded all their Boeing Dreamliners after an ANA flight made an emergency landing, but share price reaction was muted, with analysts saying that the focus was on Boeing - traded in New York - rather than the carriers.

Tokyo fell 1.52%, Hong Kong was off 0.16% and Shanghai lost 0.30%. But Seoul added 0.29% and Sydney was up 0.39%.

Asian traders were optimistic ahead of fourth quarter growth data for China due to be released Friday, which is expected to confirm the world's second-largest economy is picking up after a slowdown, dealers said.

Markets were also lifted by news that US retail sales in December rose 0.5% from the November level, according to Commerce Department figures.

The data suggested solid consumer spending despite the drawn-out debate in Washington over averting the "fiscal cliff" of across-the-board tax hikes and automatic spending cuts.

But a continued strengthening of the yen dragged down the key Tokyo market.

The Japanese unit has fallen since late last year when Prime Minister Shinzo Abe took power vowing to boost the country's moribund economy, lifting exporters as a weak yen makes their products more competitive overseas.

But comments by Japan's economy minister on Tuesday that the steep declines could hurt consumers by making imports more expensive sent the yen soaring, and it continued to rebound on Wednesday.

The dollar was at ¥88.32 against ¥88.80 in New York on Tuesday afternoon. The euro bought ¥117.41 and $1.3291 early Wednesday, against ¥118.14 and $1.3304 in US trade.

"It's clear the currency was primed for a short and sharp reprieve, and (the economy minister's) comments appear to be partly an excuse for a period of consolidation," Chris Gore, currency analyst at Go Markets in Melbourne said in a note, Dow Jones Newswires reported.

Japan Airlines and All Nippon Airways grounded all their 787 Dreamliners pending safety checks after an ANA plane made an emergency landing in southwestern Japan due to a battery problem.

It was the most serious blow yet to Boeing's troubled flagship model, which has suffered more than a week of bad news.

But the share price reaction was muted, with ANA shares down 0.54% at ¥184 in morning Tokyo trade while Japan Airlines was up 0.83% to ¥3 640.

Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management, told Dow Jones: "Boeing has been hit badly, but focus hasn't been on either ANA or JAL thus far."

Oil was up in Asian trade, with New York's main contract, light sweet crude for delivery in February rising 15 cents to $93.43 a barrel and Brent North Sea crude for February delivery advancing 22 cents to $110.52.

Gold was at $1 682.34 at 03:45 GMT compared with $1 680.90 late Tuesday.