Asia report: Stocks mixed as Japan GDP rebound disappoints

Stock markets in Asia closed in a mixed state on Tuesday, as reports emerged that a new Bank of Japan governor had been nominated for parliamentary confirmation.

In Japan, the Nikkei 225 was up 0.64% at 27,602.77, as the yen strengthened 0.13% on the dollar to last trade at JPY 132.25.

It was a positive day for the benchmark’s major components, with robotics specialist Fanuc up 1.35%, Uniqlo owner Fast Retailing adding 1.04%, and tech investing giant SoftBank Group ahead 0.65%.

Toshiba was also in focus, slipping 0.42% after the industrial and technology conglomerate reported a third-quarter loss.

It also trimmed its full-year earnings forecast to JPY 95bn from a previous estimate of JPY 120bn.

At the same time, Toshiba confirmed the departure of chief operating officer Goro Yanase after “inappropriate behaviour” emerged in the use of entertainment expenses, though he would still remain a company director.

The broader Topix index was ahead 0.78% by the end of trading in Tokyo, settling at 1,993.09.

On the economic front in Japan, the country’s gross domestic product (GDP) rose less than expected in the last quarter of 2022, according to official data.

The country’s economy expanded 0.6% year-on-year in the last three months of the year - well below the 2% growth economists polled by Reuters had pencilled in.

It was, however, still a decent bounce back from a revised 1% contraction in GDP for the third quarter.

“The Bank of Japan is likely to be unmoved by the GDP data, sticking to its assessment that Japan’s post-pandemic economy is fragile and has yet to enter a self-sustaining growth cycle,” said Duncan Wrigley at Pantheon Macroeconomics.

“Weak business investment is only likely to improve as the global economy improves, though China’s reopening rebound should be somewhat helpful.

“The monthly Reuters-Tankan survey reported a negative reading, at -6, among big Japanese firms in January, for the first time in two years, with autos, electronics and textiles firms especially glum.”

Wrigley said the same survey, however, found that growing numbers of large firms expected business conditions to improve in the coming three months.

“We think the turnaround in Japanese business investment is likely to be modest, in line with tepid global conditions.

“The Bank, likely under new governor Ueda from April onwards, will be data driven.

“The economic data are likely to remain too soft to justify a significant policy change this year.”

Reports from Reuters earlier in the day suggested Kazuo Ueda had been nominated to be the next head of Japan’s central bank, succeeding Haruhiko Kuroda.

The nomination would now need to be approved by representatives in the country’s parliament before becoming official.

On the mainland, the Shanghai Composite was up 0.28% at 3,293.28, and the technology-centric Shenzhen Component was down 0.15% at 12,094.94.

South Korea’s Kospi gained 0.5% to 2,465.64, while the Hang Seng Index in Hong Kong was 0.24% lower at 21,113.76.

The blue-chip technology stocks were on the front foot in Seoul, with Samsung Electronics up 0.48% and SK Hynix rising 3.09%.

Oil prices were in the red as the region went to bed, with Brent crude futures last down 1.36% on ICE at $85.43 per barrel, and the NYMEX quote for West Texas Intermediate falling 1.81% to $78.69.

In Australia, the S&P/ASX 200 managed gains of 0.18% to 7,430.90, while across the Tasman Sea, New Zealand’s S&P/NZX 50 slipped 0.01% to 12,074.47 as much of the country was closed and hunkering down amid a destructive extratropical cyclone.

The down under dollars were mixed against the greenback, with the Aussie last 0.02% stronger at AUD 1.4353, while the Kiwi weakened 0.27% to NZD 1.5770.

Reporting by Josh White for Sharecast.com.