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Asia markets mixed amid persistent oil weakness

Friday 03:10 BST

Overview

Asia equities were mixed amid continuing oil weakness, while Japan’s currency continued its retreat against the US dollar.

Hot topic

Japan’s yen weakened past ¥113.5 per dollar, walking back some of its previous weekly gains and making it the worst-performing major currency against the greenback in Asia trade on Friday.

John Higgins at Capital Economics predicted the recent rebound for the yen — which this week touched ¥112.92 per dollar — would prove shortlived thanks to the Bank of Japan’s accommodative monetary policy.

“Admittedly, the yen has rebounded a bit against the US dollar in the past day or two,” Mr Higgins said. “But unlike other major currencies, it has still fallen against the greenback since mid-June.”

While the yen is still well below its starting point this year of ¥118.6, Capital Economics expects the yen to weaken to ¥120 per dollar by the end of 2017.

Equities

After a strong start the Hang Seng index was down marginally as the financial segment shed 0.2 per cent — a potential spoiler for what has been a five-day winning streak for the Hong Kong benchmark that pushed it past the 26,000 level on Wednesday. The Hang Seng index is still on track for its best week in 12 months.

In Tokyo, Fast Retailing fell as much as 4.8 per cent after the owner of clothing retail chain Uniqlo reported underwhelming profit for the third quarter. The benchmark Topix was up 0.4 per cent.

Sydney’s S&P/ASX 200 index rose 0.6 per cent as the energy segment jumped 2 per cent on overnight improvement in crude oil prices, while financials climbed 0.8 per cent.

Forex

Most major Asia-Pacific currencies were gaining slightly on the greenback or flat, with the Australian dollar firming slightly to $0.7737.

The Singapore dollar was on track for its first daily loss in four days, however, after a preliminary reading on second-quarter gross domestic product undershot expectations due to slower growth in the country’s manufacturing sector.

The dollar index was up marginally at 95.782 — a quarter of one per cent firmer in the week to date — after markets interpreted remarks from Federal Reserve chair Janet Yellen as broadly dovish. Yield, which moves inversely to price, on 10-year US Treasury bonds was up 1 basis point at 2.353 per cent.

Commodities

Crude prices pared gains in Asia trade after a late-day rally during the previous session.

Brent crude, the global benchmark, was off 0.2 per cent at $48.34 a barrel after closing 1.4 per cent higher on Thursday. West Texas Intermediate, the US marker, was down the same amount at $45.98 after closing just above the $46 mark previously.

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