Asia: Shares mixed, Japan shrugs off weak inflation data

[HONG KONG] Asian stock markets were mixed on Friday, with Tokyo's main index rising as traders took heart from news employment hit its lowest level since 1997, despite a slowdown in inflation and weak consumer spending.

Tokyo's gains were in line with a broad rally on Wall Street the day before, after the Federal Reserve signalled that growth and jobs in the world's top economy remained robust and a raft of generally solid US corporate earnings.

The benchmark Nikkei-225 index on the Tokyo Stock Exchange rose 0.39 per cent, or 68.17 points, to 17,674.39 at the close, with traders buoyed by a weaker yen, which boosts Japanese exporters.

Sydney gained 18.82 points, or 0.34 per cent, to close at 5,588.3 while Seoul finished flat, closing down 1.76 points at 1,949.26.

But in mainland China, shares closed the week nearly four per cent lower, pressured by concerns about market liquidity and regulatory inspections of margin trading, dealers said.

The Shanghai Composite index fell 1.59 per cent, or 51.95 points, to 3,210.36 while Hong Kong declined 0.36 per cent, or 88.8 points, to 24,507.05.

Official data released Friday showed Japan's consumer inflation slowed for a fifth month in December to 2.5 per cent year-on-year, down from 2.7 per cent in November, on the back of plummeting oil prices and weaker consumer spending.

Adjusted for a sales tax increase, the rate rose just 0.5 per cent, well short of the Bank of Japan's 2.0 per cent inflation goal.

The news stoked fears Tokyo is losing its war on deflation, hiking pressure on the Bank of Japan to unleash more stimulus to combat the potentially damaging downward spiral of prices.

But analysts said lower energy costs could boost economic growth in the world's third-largest economy, which is a net importer of oil.

News that Japan's jobless rate edged down to 3.4 per cent, from 3.5 per cent in November, to its lowest level since mid-1997 and a pickup in industrial output also cheered traders.

"Investors feel bullish for Japanese stocks today," Shigetoshi Kamata, general manager of the research department at Tachibana Securities in Tokyo, told Bloomberg News.

"Employment has gotten better and the effects from cheaper oil have yet to come." Benchmark US indices rallied on Thursday after two days of losses, following generally positive corporate earnings, including from Ford Motor and Amazon.

The Dow Jones Industrial Average rose 1.31 per cent, the broad-based S&P 500 added 0.95 per cent, and the tech-rich Nasdaq Composite Index gained 0.98 per cent.

Oil prices were mixed in Asian trade - a day after they plunged to their lowest level in nearly six years. US oil stockpiles are at a record high.

US benchmark West Texas Intermediate for March delivery was up 12 cents at US$44.65 a barrel in afternoon Asian trade, after a volatile session the day before that saw the contract plunge below US$44 for the first time since March 2009.

Brent crude for March was down 13 cents at US$49.00 a barrel.

The dollar edged down against a basket of major currencies as traders adjusted their positions ahead of fourth-quarter US gross domestic product (GDP) figures, due later Friday.

The greenback slipped to 117.87 yen, down from 118.34 yen in New York.

The euro strengthened to US$1.1337 from US$1.1317, while it weakened to 133.63 yen from 133.93 yen.

Gold fetched US$1,264.49 an ounce, down from US$1,265.97 on Thursday.

In other markets: - Manila rose 0.95 per cent, or 72.61 points, to 7,689.91.

Global Ferronickel Holdings rose one per cent to 3.04 pesos, while Philippine Long Distance Telephone shed 0.07 per cent to 2,970 pesos.

- Wellington was down 0.27 per cent, or 15.82 points, at 5,743.99.

Fletcher Building was down 1.41 per cent at NZ$8.38, while Contact Energy was 0.14 per cent off at NZ$7.07.

- Taipei fell 0.69 per cent, or 64.99 points, to 9,361.91.

TSMC fell 1.74 per cent to NT$141.0, while HTC was 0.63 per cent lower at NT$157.0.

- Bangkok closed down 0.32 per cent, or 5.15 points, to 1,581.25.

Airports of Thailand added 4.85 per cent to 324.00 baht, while oil company PTT Exploration and Production dropped 3.54 per cent to 109.00 baht.

- Mumbai fell 1.68 per cent, or 498.82 points, to end at 29,182.95 points.

State Bank of India dropped 5.13 per cent to 310.00 rupees, while utility firm Tata Power rose 2.90 per cent to 90.55 rupees.

- Singapore closed down 0.81 per cent, or 27.85 points, to 3,391.20.

Singapore Telecom gained 0.25 per cent to S$4.08, while Oversea-Chinese Banking Corporation fell 0.67 per cent to S$10.40.

- Kuala Lumpur ended largely flat, losing 0.92 points to close at 1,781.26.

AMMB Holdings dipped 0.32 per cent to RM6.28, Tenaga Nasional fell 0.41 per cent to 14.50, while Malayan Banking added 0.69 per cent to RM8.72.

- Jakarta ended up 0.51 per cent, or 26.67 points, at 5,289.40.

Car maker Astra International added 1.29 per cent to 7,850 rupiah, while palm oil producer Astra Agro Lestari edged up 0.22 per cent to 23,250 rupiah.

AFP