Asia: Markets eye US jobs report, Nikkei riding high

[HONG KONG] Tokyo's benchmark Nikkei index closed at its highest level in more than two months Friday, while traders in Asia were closely watching a US jobs report that could indicate a Fed move on interest rates.

The Nikkei 225 shrugged off a weak lead from US markets to end 0.78 per cent higher following a week of gains, led by Japan Post's market debut.

Japan Post is now worth US$36 billion more than its government price tag following the biggest initial public offering globally this year, with its insurance unit especially in demand among investors.

The government hopes the Japan Post sell-off will draw more investment to Japanese firms and provide a lift for Prime Minister Shinzo Abe's faltering bid to kick-start the world's number-three economy.

The Hang Seng Index pared some of the morning's losses but remained down in Hong Kong afternoon trade, tracking a lower finish on Wall Street Thursday on the eve of the US payrolls report.

The Dow Jones Industrial Average was flat at the close Thursday, while the broad-based S&P 500 lost 0.11 per cent and the tech-rich Nasdaq was the laggard, dropping 0.29 per cent.

Investors are closely watching the report after Federal Reserve chair Janet Yellen said Wednesday that if US economic activity remains solid the Fed could decide to increase interest rates at its December meeting.

"There's clearly profit-taking and the market is cautious ahead of the US payrolls data," William Wong, head of sales trading at Shenwan Hongyuan Group in Hong Kong, told Bloomberg News.

"Trading is very thin in Hong Kong. China is more policy-driven so the market is expecting more measures there." The benchmark Shanghai Composite Index was up 1.86 per cent in afternoon trade.

Chinese firms have rallied in Shanghai and Hong Kong this week on hopes for economic reforms after the ruling Communist Party issued guidelines for its 2016-2020 development plan on Tuesday.

The proposals included calling for liberalisation in China's capital markets and foreign exchange regime.

Standard Chartered shares slumped in Hong Kong after a Fitch downgrade, with the ratings agency citing "unfavourable profitability and asset quality trends as well as its underperformance relative to peers" as the reason for the move.

Elsewhere, Singapore Airlines (SIA) announced a full takeover bid for its struggling budget carrier subsidiary Tigerair on Friday, vowing to redevelop it as an integral part of the group's portfolio.

The airline is offering Tiger shareholders a price of S$0.41 per share in cash and an option to subscribe for SIA shares at S$11.1043.

Tiger shares closed at S$0.31 on Thursday, meaning SIA's offer price carries a 32 per cent premium over that. Both airlines halted trading on Friday due to the announcement.

Sydney and Seoul both closed marginally down for the week overall, though the S&P/ASX 200 Index saw a small uptick on Friday.

In currency markets, the dollar ticked up to 121.88 yen from 121.74 yen Thursday in New York, still up from rates below 120 yen in recent weeks. A weaker yen is a plus for Japanese exporters.

The euro traded slightly down at US$1.0871 from US$1.0881 and was basically unmoved from 132.46 yen in US trade.

In Asian trade, US benchmark West Texas Intermediate for delivery in December was trading 31 US cents higher at US$45.50 and Brent crude for December was up 29 US cents at US$48.27 a barrel.

AFP