Asian shares struggled to sustain the slimmest of rallies today as a hesitant performance by the Japanese market fuelled fresh demand for safety in the yen and top-rated bonds.
Dealers had cautioned that the mood remained brittle and it would only take a poor US payrolls report on Friday to set the bears running again.
The strain was clearly taking a toll with the Nikkei rising, falling, then rising again to be up 1.1 per cent at 14,163. It never even got close to testing resistance at the 200-day moving average of 14,425, while there remains a large gap to fill between Monday’s close and yesterday’s opening.
The index has shed 14 per cent since the start of the year following last year’s 50 per cent boom.
The faltering performance was all the more disappointing as some major corporate names reported upbeat earnings. Panasonic Corp jumped 17 per cent after its quarterly earnings more than tripled, while Toyota rose 5 per cent after predicting record annual profits.
MSCI’s broadest index of Asia-Pacific shares outside Japan swung to a 0.3 per cent loss, while South Korea could only eke out a gain of 0.4 per cent.
On Wall Street, the Dow had ended yesterday up 0.47 per cent, while the S&P 500 added 0.76 per cent. But stock futures were trading lower on today with the S&P e-mini contract off 0.3 per cent.
The underwhelming bounce in the Nikkei led investors to again bid up the safe haven yen, with the dollar easing to 101.46 yen from an early top of 101.77.
The euro eased a touch to $1.3510, still dogged by speculation that the threat of deflation might nudge the European Central Bank into easing policy at its meeting on Thursday.
The major mover in currencies was the Australian dollar which surged after the country’s central bank on yesterday shut the door on further rate cuts, citing a pick-up in housing and consumption and higher than expected inflation.
Gold failed to get much of a boost and remained sluggish at $1,252.89 an ounce.
In commodities, prices for wheat were boosted by dry weather and declining crop conditions in the United States, while soymeal and corn were in high demand.
Reuters
