HONGKONG, China (AFP) — Tokyo stocks fell Monday despite a strong lead from Wall Street last week, as the yen’s ongoing resilience weighed on the market and Japan’s exports rose less than predicted.
Shares in Hong Kong and China both posted modest early increases with trading in Asia expected to be muted ahead of the US Presidents’ Day national holiday.
Wall Street had edged up to new records Friday as consumer products stocks gained on Kraft Heinz’s interest in buying Unilever.
With US markets closed Monday, investors were turning to corporate and political developments elsewhere.
Europe was thrown back into focus after a poll showed German Chancellor Angela Merkel’s ruling party were behind the Social Democrats for the first time under her leadership ahead of looming elections.
Uncertainty in France was also on traders’ minds.
“The political uncertainty has definitely increased as the chances of a Marine Le Pen victory and the Dutch election got into full swing,” said Greg McKenna, chief market strategist at CFD and FX provider AxiTrader.
The value of Japanese exports rose 1.3 percent in January from a year earlier — but the median estimate of economists surveyed by Bloomberg had indicated a five percent increase.
However, the slowdown in export growth was just temporary, according to Yuichi Kodama, chief economist at Meiji Yasuda Life Insurance in Tokyo.
“Exports are still on the recovery track,” he said.
– Strengthening yen –
The greenback stood at 113.14 yen, up from 112.87 in New York Friday, but well below the near 114 yen seen in Tokyo at the start of last week.
A stronger yen is generally a negative for Japan’s exporters as it dents the value of their overseas profits when sent back home.
“With the yen strengthening, exporters’ earnings outlooks are taking a hit,” Mitsugu Yokoyama, head of investment research at Ando Securities, told Bloomberg News.
Singapore was awaiting its budget Monday, which is set to deliver a modest fiscal push to the economy facing challenging trade prospects. Prices in the city-state were marginally down early Monday.
In the commodity markets, WTI and Brent both weakened Monday.
Some analysts suggested ballooning crude stocks may dampen future oil prices.
“If demand growth doesn’t flow through to balance out the market as OPEC expected, then the ability to drive prices sustainably into the $55/$60 region they seem to be targeting is in question,” McKenna added.
Oil-producing nations in the OPEC cartel have agreed to scale back production, helping send oil prices back above $50 from lows less than $30 per barrel last year, but recent data has shown US shale producers are bringing wells back on line.
– Key figures around 0230 GMT –
Tokyo – Nikkei 225: DOWN 0.2 percent at 19,187.96
Hong Kong – Hang Seng: UP 0.6 percent at 24,170.07
Shanghai – Composite: UP 0.4 per cent at 3,215.79
Euro/dollar: DOWN at $1.0611 from $1.0615
Pound/dollar: DOWN at $1.2416 from $1.2421
Dollar/yen: UP at 113.14 yen from 112.87 yen
Oil – Brent North Sea: DOWN 8 cents at $55.73 per barrel
Oil – West Texas Intermediate: DOWN 3 cents at $53.37
New York – Dow: UP less than 0.1 percent at 20,624.05 (close)
London – FTSE 100: UP 0.3 percent at 7,299.96 (close)
