Asian shares slip as Fed nears, Japan up on yen weakness
HONG KONG (AP) — Japanese stocks rose as the yen weakened but other Asian benchmarks were mostly lower as investors hunkered down ahead of the Fed’s key meeting next week on interest rates.
KEEPING SCORE: Japan’s benchmark Nikkei 225 index jumped 1 percent to 19,235.30 after the yen failed to hold on to gains from the day before. A weaker currency makes Japan’s electronics and cars cheaper for overseas customers. South Korea’s Kospi lost 0.3 percent to 1,946.58. Hong Kong’s Hang Seng slipped 0.6 percent to 21,570.59 and mainland China’s Shanghai Composite Index lost 0.8 percent to 3,426.12. Australia’s S&P/ASX 200 dipped 0.2 percent to 5,026.30. Benchmarks in Taiwan and Southeast Asia also lost ground.
FED OCUS: Investors are now zeroing in on next week’s crucial two-day Fed meeting that wraps up on Dec. 16. Policymakers are widely expected to announce that they’re raising key interest rates from their record low levels for the first time in seven years. Recent economic reports indicate that the U.S. economy is healthy enough to withstand a rate hike. Markets will be monitoring upcoming data, such as a retail sales report for November expected after Asian markets close, though it’s not expected to greatly influence the Fed’s decision.
CHINA DATA: Markets are also cautious ahead of a batch of monthly economic data expected on Saturday, including retail sales, fixed asset investment and industrial production. Further out, a report on foreign direct investment in China is due on Wednesday. The latest figures will provide an update on the world’s second biggest economy, which is struggling with a stubborn downturn.
QUOTE-WORTHY: “There is tentative hope that Asia-Pacific stock markets will end the week on a high note after the strong US session overnight,” Angus Nicholson of IG wrote in a commentary. “The lead up to a likely rate rise by the Fed has caused consternation in markets and last minute positioning, especially from the People’s Bank of China.”
WALL STREET: The Dow Jones industrial average climbed 0.5 percent to close at 17,574.75. The S&P 500 index rose 0.2 percent to 2,052.23 and the Nasdaq composite increased 0.4 percent to 5,045.17.
ENERGY: The price of U.S. benchmark crude fell further, sinking 30 cents to $36.47 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 40 cents, or 1 percent, to settle at $36.76 a barrel on Thursday, its lowest level since early 2009. Brent crude, the international benchmark, fell 31 cents to $39.82 a barrel in London.
CURRENCIES: The dollar rose to 122.06 yen from 121.94 yen. The euro fell to $1.0933 from $1.0937.