Asia: Stocks dip but Japan bucks trend on oil rebound; dollar wobbles

[TOKYO] Asian stocks dipped on Monday amid a lack of immediate directional cues in light year-end trade, although Japanese shares managed to rise following a rebound in crude oil prices from multiple-year lows.

Investors across asset markets were without some of the usual leads as markets in Europe and North America and many in Asia were closed on Friday for Christmas.

MSCI's broadest index of Asia-Pacific shares outside Japan gave up earlier modest gains and were last down 0.2 per cent. The index was on track for an 11 percent loss this year.

Shanghai shares scraped out a 0.1 per cent gain on Monday, while Hong Kong's Hang Seng dropped 0.4 per cent. South Korea's KOSPI fell 1 per cent.

Stocks affiliated with Samsung Group fell after the South Korean conglomerate said on Sunday its battery-making arm Samsung SDI will sell shares in sister firm Samsung C&T Corp to comply with regulatory requirements.

Japan's Nikkei rose 0.2 per cent, with soft domestic production and retail data offset by a rebound in crude oil prices. "Disappointing production and retail figures have crushed the chances of any sort of photo-finish for the Nikkei this year," said Martin King, co-managing director at Tyton Capital Advisors. "But oil holding in the high 30s will provide some welcome respite for energy companies at year-end and see the index close out 2015 in 19,000 point territory." The Nikkei, lifted in part by Japanese Prime Minister Shinzo Abe's reflationary policies, was headed for its fourth straight year of gains.

US crude gained last week thanks to falling inventories, reduced drilling and the lifting of a ban on most US crude exports. US crude nudged down 0.6 per cent to US$37.87 a barrel after jumping nearly 9 percent last week and away from US$33.98, its lowest level since February 2009.

Brent crude also rose nearly 3 per cent last week, moving away from an 11-year trough. It last fetched US$37.74 a barrel, down 0.4 per cent on the day.

Still, the warmer-than-usual winter affecting many parts of the world, attributed to the El Nino weather pattern, meant potentially less crude demand for heating purposes. Analysts also pondered the wider economic impact of the weather pattern. "The United States is experiencing a winter with record high temperatures and the focus is on whether first quarter economic activity would be negatively affected because of this," wrote Shinichiro Kadota, chief Japan FX strategist at Barclays in Tokyo. "US data related to housing and private consumption, which are swayed by winter conditions, bear watching," Kadota said.

In currencies, the dollar fetched 120.38 yen, wobbling near a two-month low of 120.05 struck on Friday. The dollar has lost some steam, with investors locking in profits after the Federal Reserve this month hiked interest rates for the first time in nine years.

Late last week, a weaker-than-expected US index on employment cost also weighed on the greenback. The currency market will be keeping an eye on coming US data to gauge if the world's largest economy is strong enough to withstand further rate hikes in 2016.

The euro was flat at US$1.0973, having spent the past two sessions in a tight US$1.0944-US$1.1000 range.

The Australian dollar was down 0.2 per cent at US$0.7274 but still within distance of a two-week peak of US$0.7295 scaled on Friday. Relatively high Australian yields have recently worked in favour of the currency.

REUTERS