Asian Shares Mixed, Falling in Japan But Rising in China

23 Dec 2015 | Author: | No comments yet »

Asian shares fall as yen weighs on Japan.

The dollar was almost flat against the yen in quiet, rangebound Asia trade Monday, with gains capped after the Bank of Japan disappointed the market with its steps to complement its existing easing program. Shares in Japan fell Monday amid worries that the central bank will be reluctant to expand its easing program in the coming year, while in China, property and brokerage shares surged.Asian stocks declined on Monday following a plunge on Wall Street, and as a stronger yen weighed on Japanese exporters, though losses were limited by a general lack of investor interest in a holiday-heavy week. However, the dollar managed to stay above Y121.00-mark in a sign that dip buying was kicking in, but failed to go up further with no fresh trading cues and many investors away ahead of the holiday season.

While the central the bank tweaked the average remaining maturity of the Japanese government bonds it purchases, it left the overall target of annual asset purchases unchanged at around Y80 trillion ($650 billion). Chinese stocks got a boost from a surge in property shares as a fight unfolded between Wang Shi, chairman of China Vanke Co. 000002, +1.64% , the country’s largest property firm, and the firm’s new largest shareholder, a group of investors who have made an unsolicited effort to take control of Vanke. The additional purchases of exchange-traded equity funds, in addition to the portion it has purchased annually since late 2014, amount to only about 10% of the size of the current ETF buying. The BOJ said it considers the steps announced Friday as part preparation for bold measures in the future. “But it seems the market has been confused and gained perspective that the BOJ announcement revealed the limitations of what it can do,” said Shinichiro Kadota, vice president of research at Barclays in Tokyo. “Due to concerns and confusion about the BOJ policy, the dollar will likelyremain top heavy at this moment,” said Mr. But their initial enthusiasm turned into disappointment and they opted to offload the dollar as they found the steps were “supplementary” in nature.

The U.S. currency gained slightly against the common currency, which fell to $1.0870 from $1.0873 late Friday after Spain’s ruling Popular Party lost its parliamentary majority in elections Sunday. Analysts say the corporate fight over China Vanke, which said it has plans to issue an undisclosed number of new shares, has boosted expectations that the property sector will remain attractive for big fund managers.

Toshiba plunged 9.8% after Dow Jones reported over the weekend that people familiar with the matter said the company is likely to post a full year net loss of around ¥500 billion. Though the Popular Party won the most votes, it wasn’t enough for it to rule on its own, putting Spain on the path toward a minority or coalition government. Recent stake increases in financial blue chips are also boosting sentiment in China—brokerage firms were up including Citic Securities 0267, -0.58% and GF Securities 000776, +2.82% , which gained than 3%. “Insurance firms have allocated more capital in financial blue chips” and “this could be the catalyst for inflow of new funds by year-end,” said Xiao Shijun, an analyst at Guodu Securities. Among deals by insurers earlier this month, Anbang Insurance Group raised its stake in Sino-Ocean Land Holdings, and acquired a 5% stake in China Vanke. In other currencies, China’s central bank guided the onshore yuan stronger against the U.S. dollar, breaking 10-straight sessions of setting the reference rate weaker.

In Hong Kong, shares of Fosun International Ltd. were up 2.3%, even as the flagship of Chinese conglomerate Fosun Group 0656, +4.16% , said Sunday it had withdrawn its bid for London merchant bank BHF Kleinwort Benson. The company has said Guo was assisting in government investigations unrelated to the company, and the chairman had since reappeared at a company event last Monday.

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