Tokyo stocks rally on vote bets but N Korea weighs on region
AFP
AFP, HONG KONG: Japanese stocks rallied on a weaker yen yesterday as traders bet Prime Minister Shinzo Abe will call a snap election, but other Asian markets struggled on persistent North Korea concerns following a weekend of tense exchanges with Donald Trump.
Abe is expected to announce a vote for next month, in which most see him as likely to cruise to victory with the main opposition in disarray and his popularity boosted by his handling of the ongoing Korean crisis.
Adding to the positive tone in Tokyo was a report saying the leader is also considering a multi-billion-dollar stimulus for the stuttering economy.
The prospect of more cash being pumped into financial markets weighed on the yen, providing a boost to exporters in Tokyo trade.
The dollar rose back around 112.50 yen, having fallen at the end of last week below 112 yen, while the Nikkei went into the break 0.6 per cent higher.
The yen is in a favourable range for Japanese stocks, Toshikazu Horiuchi, a broker at IwaiCosmo Securities, told the news agency. Market players are paying attention to the election, hoping for campaign pledges to boost the economy.
However, most other regional markets were unable to track Tokyos lead following another weekend stand-off between Washington and Pyongyang.
After North Koreas threat last week to test a hydrogen bomb in the Pacific, Trump and Kim Jong-Uns regime traded fresh barbs.
With the North warning of a missile attack on the US and Trump tweeting its leaders wont be around much longer!, Russian Foreign Minister Sergei Lavrov said we could drop into a very unpredictable nosedive.
While most observers say there is little chance of a nuclear war, the ongoing spat is keeping traders on their toes and Greg McKenna, chief market strategist at AxiTrader, said: It all sounds like its headed toward some sort of conflict.
Hong Kong retreated 0.8 per cent and Seoul was off 0.4 per cent while Shanghai fell 0.2 per cent and Singapore was also down.
However, Sydney edged up 0.3 per cent and Wellington was up 0.4 per cent despite uncertainty following the weekend vote that left New Zealand with a hung parliament.
On currency markets the New Zealand dollar slipped 0.8 per cent, while the euro edged down as German Chancellor Angela Merkel looked set to win a fourth term but with a much reduced share of the vote and a big jump in support for the far-right party.
But Marito Ueda, senior dealer at FX Prime, said the single currency was beginning to rebound as she secured her next term anyway.
