Asia: Market rally eases but Tokyo pushes higher

[HONG KONG] Japanese stocks rallied again on Thursday while traders on most other markets took a breather after a strong three-day rally, while the pound edged down ahead of a Bank of England policy meeting.

The Nikkei index headed for a fourth straight gain as investors awaited details from the government of fresh stimulus after a sweeping election victory at the weekend.

But the yen clawed back some losses against the dollar and gold, considered a safe haven bet, also gained with analysts saying there remained a sense of unease on trading floors after last month's shock vote by Britain to leave the EU.

"Investors remain very skittish and it won't take much to rattle sentiment," James Audiss, a senior investment adviser at Shaw and Partners in Sydney, told Bloomberg News.

Markets have surged this week on talk that central banks and governments around the world will ramp up their spending and stimulus to kick-start economic growth.

Japan's Prime Minister Shinzo Abe is expected to unveil a new round of spending as the world's number three economy limps along.

Reports that Tokyo will introduce so-called helicopter money - direct cash injections for the economy such as straight into consumers' banks - were rebuffed by the government but there is still speculation such measures could be introduced.

By the break, Tokyo was up 0.8 per cent up, while the dollar slipped to 104.17 yen from 104.52 yen in New York on Wednesday. Gaming giant Nintendo ended the morning another 16 per cent higher thanks to the huge success of its Pokemon Go game. The firm has now soared more than 60 per cent in a week.

The Bank of England will gather later in the day for a meeting where many expect it will cut interest rates from an already record low 0.5 per cent to 0.25 per cent, or even zero by August as it tries to plot a course after the Brexit vote.

With the meeting hours away, the pound dipped to US$1.3124 from US$1.3144.

However, it is well up from the levels below US$1.28 touched last week, thanks to the surprisingly quick change of leadership of the ruling Conservative party, with Theresa May taking over from David Cameron as prime minister.

Hong Kong was flat and Shanghai eased 0.5 per cent, a day after China unveiled data showing imports and exports both fell last month, reinforcing worries about the slowing economy.

The figures bode ill for Friday's release of second-quarter economic growth figures, which is expected to come it at a seven-year low of 6.6 per cent, according to a survey by AFP.

Elsewhere, Sydney edged up 0.3 per cent and Singapore and Seoul fell 0.2 per cent apiece.

On Wall Street, the Dow and S&P 500 posted new records, albeit with smaller gains than seen recently, after a Federal Reserve report described the US economy as still modestly growing with signs of a slowdown in consumer spending.

Oil prices rebounded following a 4.5 per cent slump Wednesday caused by a smaller-than-forecast drop in US inventories.

In morning Asian trade West Texas Intermediate was up one per cent at US$45.19 and Brent added 0.9 per cent to US$46.67.

AFP