Japanese stocks strengthen as investors await cues from US and UK market
28 May 2013
Japanese stocks gained strength as Asian shares rose today, even as investors continued to wait for direction from the US and UK markets when they resume trade after the holiday yesterday, in the wake of the turbulence last week.
The Nikkei stock average surged 1.4 per cent, recovering from a 1.4 per cent drop at the open which came on top of yesterday's 3.2 per cent tumble. The Nikkei average fell 7.3 per cent Thursday, the largest single-day loss since the March 2011 earthquake and tsunami.
Firmer Japanese shares led to yen selling, easing investor concerns about having to unwind their yen-selling positions to cover losses.
The dollar was up 0.9 per cent against the yen to 101.86 after sliding to a two-week low of 100.66 yen on Friday. It had earlier hit a peak of 4-1/2 year 103.74 yen only a few days earlier on 22 May.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.2 per cent at 468.44, holding above Friday's five-week low of 464.99.
China Taiping, the first overseas-listed Chinese insurer, registered a 13 per cent jump in Hong Kong, while Toyota Motor Corp, the world's biggest carmaker, rose 4.9 per cent in Tokyo.
Toho Holdings Co shed 5.3 per cent as the Japanese maker of medical equipment said it would raise funds to reinvest in capital. Tokyo Electric Power Co was down 6 per cent, along with falling Japanese utilities.
The MSCI Asia Pacific Index was up 0.2 per cent to 137.17 in Hong Kong, after slipping as much as 0.6 per cent.
About five stocks gained for every three that fell as the gauge retreated the past five days amid speculation the Federal Reserve would cut down its bond purchases with the improvement in the US economy and China manufacturing data missing estimates.
According to Adrian Mowat, Hong Kong based chief Asian and emerging market strategist at JP Morgan Chase & Co, who told Bloomberg, there were still a lot of international investors that had not positioned themselves in Japan. He said he would advise moving into consumer-related stocks.