Asia report: Markets rise, RBA surprises with rate hold

It was a positive finish for the few markets that traded on Tuesday in the Asia-Pacific region, in what is always a quiet week during Lunar New Year celebrations, as Australia’s central bank stood pat on interest rates.

Bourses in mainland China, South Korea and Hong Kong were all closed for the holiday, which is the most important celebration of the year in many parts of Asia.

In Japan, the Nikkei 225 advanced 0.28% to 27,078.48, as the yen strengthened 0.4% on the dollar to last trade at JPY 114.65.

Uniqlo owner Fast Retailing was down 1.97%, while among the benchmark’s other major components, robotics specialist Fanuc was up 1.83% and technology investing giant SoftBank Group was 4.43% firmer.

Electronics giant Sony pared back earlier gains, but still closed up 0.39% after it announced the acquisition of video games maker Bungie for $3.6bn.

The broader Topix index eked out gains of 0.01%, or just 0.13 points, to end the session in Tokyo at 1,896.06.

Fresh economic data out of Japan showed the country’s factory activity growing at the most rapid cadence in more than seven years, amid strengthening output and a surge in orders.

Oil prices were mixed as the region went to bed, with Brent crude last down 0.03% at $89.23 per barrel, while West Texas Intermediate gained 0.03% to $88.13.

In Australia, the S&P/ASX 200 was 0.49% firmer at 7,006.00, as the Reserve Bank of Australia maintained its cash rate target at the record low 0.1%, where it has been since the start of the Covid-19 pandemic.

That move went against market expectations for a rate increase, although the central bank did sate part of the market’s forecast by confirming the end of its bond buying programme.

“Ceasing purchases under the bond purchase programme does not imply a near-term increase in interest rates,” said Reserve Bank governor Philip Lowe.

“As the board has stated previously, it will not increase the cash rate until actual inflation is sustainably within the two-to-three percent target range.

“While inflation has picked up, it is too early to conclude that it is sustainably within the target band.”

Data out of Canberra, meanwhile, showed retail sales falling in Australia by 4.4%, despite the busy Christmas shopping season.

Retail sales had grown by 7.3% in November after long-lasting restrictions were lifted in many areas, although the spread of Omicron put a lid on consumer confidence in December.

Across the Tasman Sea, New Zealand’s S&P/NZX 50 was 1.43% firmer at 12,058.94 amid a bout of what local analysts saw as bargain-hunting an oversold market.

Specialist dairy producer Synlait Milk led the Wellington bourse, rising 6%, with a recently-weaker New Zealand dollar also lifting other export-focussed stocks.

Fresh produce exporter Scales Corporation was ahead 5.8%, and medical technology firm Fisher & Paykel Healthcare was 4.5% firmer.

Both of the down under dollars were last stronger on the greenback, with the Aussie last ahead 0.4% at AUD 1.4090, and the Kiwi advancing 0.49% to NZD 1.5133.