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Asia: Tokyo lifted by weak yen but Shanghai, Hong Kong slip

[HONG KONG] Shanghai and Hong Kong stocks fell on Tuesday after data indicated further weakness in Chinese consumer spending, but Tokyo was up as the dollar rose to three-month highs against the yen.

The euro continued to flounder against the greenback a day after the European Central Bank launched its stimulus "bazooka", while traders are also keeping a wary eye on Greece's ongoing debt talks.

Shanghai fell 0.57 per cent and Hong Kong lost 0.22 per cent as news that China's consumer price inflation rebounded in February from a more-than-five-year low was overshadowed by a steep drop in consumer prices, indicating more softness down the line.

Seoul was also down 0.20 per cent but Tokyo rose 0.22 per cent by lunch thanks to the weaker yen, while Sydney added 0.42 per cent.

The mixed picture came after New York provided a positive platform, with the three main indexes ending higher after Apple launched its long-awaited watch, while GM announced a US$5-billion share buyback.

The Dow rose 0.78 per cent and the S&P 500 gained 0.39 per cent. The tech-rich Nasdaq advanced 0.31 per cent.

In China, the National Bureau of Statistics said consumer inflation hit 1.4 per cent in February, well up from 0.8 per cent the previous month and much better than the 1.0 per cent forecast.

However, the NBS also said the price of goods at the factory gate slumped 4.8 per cent, the worst result since October 2009, driven by falling energy prices.

The data come after authorities cut interest rates in November as well as last month.

Tokyo's Nikkei was Asia's best performer in early dealing as exporters were supported by the weakening yen.

The dollar bought 121.51 yen early Tuesday, its strongest since December and up from 121.15 yen in New York late Monday.

The greenback continues to rally after Friday's blistering US jobs report that fanned speculation the Federal Reserve will hike interest rates as soon as June.

"The US economy is moving in the right direction, and expectations of a rate hike should continue until the Fed's meeting next week, which means the yen could continue to weaken against the dollar," Toshihiko Matsuno, chief strategist at SMBC Friend Securities in Tokyo, told Bloomberg News.

In other currency trade, the euro bought US$1.0835 and 131.58 yen on Tuesday against US$1.0854 and 131.49 yen.

The ECB kicked off its 60 billion-euro-a-month asset-buying scheme Monday hoping it will fend off deflation in the eurozone and also kickstart economic growth.

However, there remain worries about Greece's bailout extension as it starts technical talks this week with its regional partners.

Oil prices were mixed. US benchmark West Texas Intermediate gained one cent to US$50.01 while Brent eased 12 cents to US$58.41.

Gold fetched US$1,167.61 against $1,174.98 late Monday.