TOKYO – Asian stock markets were cheered Friday by a record close on Wall Street and talk of further stimulus efforts from the European Central Bank. Investors were also looking ahead to a report on U.S. employment.
KEEPING SCORE: Japan’s Nikkei 225 was up 0.4 per cent at 16,865.76 and China’s Shanghai Composite added 0.6 per cent to 2,440.29. Hong Kong’s Hang shed 0.7 per cent to 23,485.64 while Australia’s S&P/ASX 200 climbed 0.5 per cent to 5,532.30. Markets also rose in Taiwan, Singapore, Thailand and New Zealand. Benchmarks in Indonesia, South Korea and Philippines fell.
EUROPE STIMULUS: The European Central Bank is under pressure to provide more support for Europe’s recovery and prevent prices from falling. The ECB decided Thursday to keep its benchmark interest rate unchanged at 0.05 per cent, a record low. But after talk of doing more from ECB President Mario Draghi, markets turned higher. Germany’s DAX closed with a gain of 0.7 per cent, while the CAC-40 in France gained 0.5 per cent. Britain’s FTSE 100 picked up 0.2 per cent.
THE QUOTE: “European stocks were higher, and there is a welcoming mood for the cheap yen,” said Yosuke Shimizu, analyst at Argo Navis consultancy in Tokyo. The Nikkei had taken a rest Thursday from its surge after the Bank of Japan last week announced new stimulus, but was rebounding as the dollar gained ground on optimism about a continued U.S. recovery, he said.
JAPANESE EARNINGS: Earnings reports coming in lately from top Japanese companies have nearly all gained a healthy boost from the recent weakening of the yen, which has accelerated after the Bank of Japan announced additional monetary easing. A weak yen lifts the value of overseas revenue for giant exporters like Toyota Motor Corp.
WALL STREET: Solid earnings reports from U.S. companies helped push stock markets up to another record close on Wall Street. The S&P 500 edged up 0.4 per cent to 2,031.21. The Dow Jones industrial average also rose 0.4 per cent to 17,554.47. The Nasdaq composite gained 0.4 per cent to 4,638.47.
JOBS REPORT: A strong report on U.S. hiring from payrolls processor ADP suggested Friday’s official monthly employment figures will show robust employment growth. If that is the case, it will allay lingering worries that the Fed’s recent decision to withdraw its extraordinary stimulus, provided through a massive program of bond buying, was premature. Intended to spur economic recovery after the global recession, the stimulus helped markets defy gravity even in the face of poor company earnings or bad economic news.
CURRENCIES: The dollar rose to 115.28 yen from 115.28 yen late Thursday. The euro slipped to 41.2377 from $1.2381.
ENERGY: Benchmark U.S. crude oil was down 22 cents to $77.69 a barrel in electronic trading on the New York Mercantile Exchange.