Asia report: Markets mixed as Japan, China return from holiday

Markets in Asia finished in a mixed state on Thursday, with a number of bourses returning from holidays, as investors began to close their wallets ahead of a key jobs report stateside.

In Japan, the Nikkei 225 was up 1.8% at 29,331.37, as the yen strengthened 0.09% against the dollar to last trade at JPY 109.11.

Of the major components on the benchmark index, robotics specialist Fanuc was up 4.07%, Uniqlo owner Fast Retailing added 3.43%, and technology giant SoftBank Group was 1.57% firmer.

The broader Topix index gained 1.54% by the end of trading in Tokyo, settling at 1,927.40.

On the mainland, the Shanghai Composite was 0.16% weaker at 3,441.28, and the smaller, technology-centric Shenzhen Composite lost 0.97% to 2,276.58.

South Korea’s Kospi was up 1% at 3,178.74, while the Hang Seng Index in Hong Kong added 0.77% to 28,637.46.

Seoul’s blue-chip technology stocks were on the back foot, however, with Samsung Electronics slipping 0.36% and SK Hynix sliding 2.27%.

The moves in Asia came ahead of the US nonfarm payrolls report for April on Friday, with market participants waiting to see if payrolls for the month top one million, having reached 916,000 in March.

“A mixed Asia session saw Japanese stocks outperforming on their return from holiday, while shares in China and Australia dropped after Beijing announced a suspension of regular economic dialogue with Canberra,” said FXTM chief market strategist Hussein Sayed.

“If Friday’s US jobs report comes out strong enough to force the Federal Reserve to announce tapering of asset purchases later this year, we could see the upward trajectory in long term bond yields resume after its latest pause.

“However, looking at recent economic data releases, it seems the economy is failing to surprise to the upside.”

Sayed noted that the employment component of the US PMI manufacturing and services indices both came in slightly above market expectations earlier in the week, while private payrolls rose by 742,000 jobs in April - its biggest gain in seven months, but still short of the 800,000 forecast.

“Today’s initial jobless claims will also provide more information about the recovery in the labour market.

“But it is Friday’s nonfarm payrolls report that will determine how bond yields could move and possibly take the dollar in the same direction.”

Oil prices were lower at the end of the Asian day, with Brent crude last down 0.19% at $68.83 per barrel, and West Texas Intermediate losing 0.26% to $65.46.

In Australia, the S&P/ASX 200 was down 0.48% at 7,061.70, while across the Tasman Sea, New Zealand’s S&P/NZX 50 was off 0.75% at 12,751.67.

The down under dollars were mixed against the greenback, with the Aussie last 0.07% stronger at AUD 1.2898, while the Kiwi weakened 0.06% to NZD 1.3867.