Japanese stocks gain on yen weakness, oil advances

Sydney - Japanese shares rose on Monday helped by a weaker yen and after US equities capped their best week in five years. The dollar steadied and oil consolidated above $60 a barrel.

Asian equities are building on their best week since September 2016, with stocks in South Korea also gaining, even as markets in Hong Kong and China are closed for the Lunar New Year holiday and in the US for Presidents’ Day.

S&P 500 Index futures were higher after the benchmark closed little changed on Friday, erasing most gains as investors assessed the implications of new indictments in the Russia/US. election investigation.

The index ended 4.3% higher for the week and the 10-year Treasury yield fell back below 2.9%.

Meanwhile, the yen drifted as data showed Japan’s exports and imports grew strongly in January from a year earlier in a sign the economy continues to expand. The increase in imports resulted in the first monthly trade deficit since May 2017.

Global equities staged a recovery last week after their worst selloff in two years as investors fretted about the outlook for high interest rates and inflation and US 10-year Treasury yields approached 3%.

Traders return to their desks in Hong Kong on Tuesday, while Chinese markets reopen on Thursday.
Here are some key events scheduled for this week:

The Reserve Bank of Australia releases minutes of its February meeting on Tuesday. The Federal Reserve Wednesday will release minutes of its January 30 to 31 meeting, Janet Yellen’s last as chair, where officials kept the rate unchanged. Bank of England Governor Mark Carney addresses the Parliament’s Treasury Committee on the February 8 policy decision and forecasts.

A slew of UK economic data is due including fourth-quarter GDP and employment figures.

Fed policy makers speaking this week include New York Fed President William Dudley and Atlanta Fed President Raphael Bostic. Cleveland Fed President Loretta Mester is among speakers at the US Monetary Policy Forum in New York City.

Japan updates on CPI on Friday. Companies announcing earnings this week include: Walmart, Home Depot, HSBC, BHP Billiton, Glencore, Barclays.

These are the main moves in markets:

Stocks

The Topix index jumped 1.7% as of 9:35am in Tokyo and the Nikkei 225 Stock Average rose 1.4%. Australia’s S&P/ASX 200 added 0.5% and the Kospi index climbed 1%. Futures on the S&P 500 rose 0.2%.

The underlying measure rose less than 0.1% at the close of trading in New York on Friday. The MSCI Asia Pacific Index was up 0.7%.

Currencies

The Bloomberg Dollar Spot Index inched lower less than 0.1%. It advanced on Friday for the first time in more than a week. The Japanese yen fell 0.1% to 106.29 per dollar, retreating from a high of 105.55 on Friday.

The euro rose 0.1% to $1.2420. The British pound advanced 0.1% to $1.4035.

Bonds

The yield on 10-year Treasuries fell four basis points to 2.87%. Treasuries are not trading Monday because of the holiday in the US Australia’s 10-year bond yield lost four basis points to 2.89%.

Commodities

West Texas Intermediate crude rose 0.2% to $61.81 a barrel. It posted its first weekly increase since last month. Gold added 0.2% to $1 349.21 an ounce.