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Asia: Shares gain as Japan stocks rally after BOJ

Friday, June 16, 2017 - 12:02

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[SYDNEY] Asian stocks advanced, led by a rally in the Topix as the yen held losses after the Bank of Japan left monetary policy unchanged. Treasuries maintained declines and gold extended a drop as traders digested the more hawkish tone struck by the Federal Reserve.

Japanese shares extended gains that were sparked earlier in the day by the steepest slide in the yen since January. Crude held losses, trading at a seven-month low.

The greenback strengthened and 10-year Treasury yields climbed Thursday as US economic data gave traction to the Fed's suggestion that the strength of the labor market will prevail over weakness in inflation.

With Japanese inflation still distant from its target, the BOJ maintained its promise to keep pouring stimulus into the economy, days after the Fed raised interest rates and set out more details of its plan to normalise policy.

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The focus now turns to Governor Haruhiko Kuroda's press conference, where investors will look for any clues he gives about an eventual exit from stimulus.

Investors resumed selling the US major technology shares that have contributed most to equity records this year, as the threat of higher interest rates prompted a shift from growth into value shares.

Stocks

The MSCI Asia Pacific Index climbed 0.2 per cent at 12:35pm in Tokyo. Technology shares in the gauge were little changed, erasing earlier declines.

Japan's Topix climbed 0.8 per cent, erasing its loss for the week. SoftBank Group Corp jumped 3.1 per cent after sliding 6.5 per cent over four days.

Australia's S&P/ASX 200 Index advanced 0.3 per cent and South Korea's Kospi fell 0.1 per cent.

Hong Kong's Hang Seng increased 0.4 per cent and Singapore's Straits Times Index added 0.3 per cent. The Shanghai Composite Index lost 0.3 per cent.

Futures on the S&P 500 rose 0.1 per cent after the index fell 0.2 per cent on Thursday. Tech shares in the measure lost 0.5 per cent , while bond proxies from real estate to utilities led gains. The Stoxx Europe 600 Index slid 0.4 per cent , bringing its weekly decline to 1.1 per cent .

Currencies The yen fell 0.2 per cent to 111.17 per US dollar, after dropping 1.2 per cent in the previous session, the most since January. The Bloomberg Dollar Spot Index was little changed after rising 0.5 per cent on Thursday to snap three days of losses.

The South Korean won dropped 0.7 per cent.

Bonds

The yield on 10-year Treasury notes rose less than one basis point to 2.17 per cent after rising four basis points in the previous session. The rate dropped on Wednesday to 2.13 per cent, the lowest level since November.

Japanese 10-year yields rose one basis point, while those in Australia climbed five basis points.

Commodities

West Texas crude futures declined less than 0.1 per cent to US$44.44 a barrel. Oil is down about 3 per cent for the week, trading at the lowest level since November.

Gold dropped 0.1 per cent to US$1,252.72, bringing its loss for the week to 1.1 per cent.

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