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Wednesday, December 29, 2010

Asian stocks advance as China data boosts hopes

Photo: Reuters

SINGAPORE - Asian stocks rose on Friday as stronger-than expected economic indicators from China and the United States boosted confidence in the global economic recovery.

European shares also rose, after slipping in the previous four sessions amid debt concerns in the euro zone. The FTSEurofirst 300 rose 0.2 percent, Britain's FTSE 100 gained 0.6 percent, Germany's DAX rose 0.4 percent and France's CAC 40 was up 0.3 percent.

Chinese manufacturing gathered momentum last month, handily beating market forecasts and providing further evidence that the economy is pulling smoothly out of a second-quarter slowdown.

The MSCI index of Asia Pacific stocks outside Japan was up 0.34 percent compared with a rise of 0.24 before the release of China's Purchasing Managers Index. The index gained more than 17 percent in the last quarter.

"This looks like the real deal. It's not just inventory correction. We think that end demand is picking up in China and the economy has stabilized after the summer lull," said Frederick Neuman, co-head Asian economics, HSBC in Hong Kong.

Japan's Nikkei average closed up 0.37 percent on Friday, helped by short-covering after sharp falls the previous day and after US economic data provided a degree of optimism.

The index gained 6.2 percent in September, it is more than 2 percent off the peak hit after Japanese authorities conducted currency market intervention on September 15 to weaken the yen.

"Japanese stocks are recouping some ground as investors appear to be correcting extreme pessimism triggered yesterday by the yen's advance and worries about European finance problems," said Koichi Nosaka, a market analyst at Securities Japan Inc.

Data watch

US data on Thursday showed new jobless benefits fell last week and regional manufacturing grew faster than expected.

Later on Friday, the Institute for Supply Management is scheduled to release US manufacturing data.

US Treasury prices slipped as investors turned to stocks and the dollar held steady after dropping to an eight-month low against a basket of currencies the previous day.

The euro paused below a five-month high on the dollar hit the previous day, helped by data showing euro zone banks are relying less on funds from the European Central Bank.

The dollar dipped 0.1 percent to 83.47 yen, but stayed above the previous day's low at 83.16 yen and last month's 15-year trough below 83.00 that had prompted Japanese authorities to intervene for the first time in six years.

The Australian dollar jumped on optimism that the strong data from China augured well for the country's resource exports.

Oil rose above $80 on Friday, staying at a seven-week high, as the renewed momentum in China's manufacturing sector pointed to stronger demand. Copper also advanced on hopes of greater Chinese demand.

But gold, widely seen as a safe haven, also ticked up, hovering within sight of a lifetime high, although traders said the improving data from China and the US could curb gains.

Traders said spot gold, which stood at $1,310.40 an ounce after hitting a record around $1,315 the previous day, remained volatile as investors watched for signs of a firmer US recovery.

"I guess speculation will still be rife as to the state of the US economy. The need or not for a QE2 from the Fed," said Darren Heathcote, head of trading at Investec Australia in Sydney.

Monday, October 18, 2010

Telehouse Vietnam comes on line in Hanoi

A joint data venture between FPT’s Information System Corp (FPT IS), KDDI Corp and ITX Corp of Japan, called Telehouse Vietnam, began operating in Hanoi on Tuesday.

According to Dao Vu Long, Telehouse Vietnam’s Managing Director, the increasing demand for data centers is directly proportional to Vietnam’s rapid development of its information and technology sector.

The joint venture between FPT IS and the two Japanese corporations aims to bring a new data center up to international standards to Vietnam, he said.

The center, which sits on a 1,900-square-meter site, is designed and equipped with global data center Telehouse standards to ensure round-the-clock security for customers’ datum and minimize any risks, even during power cuts.

Covering 39 locations in ten countries worldwide, the global Telehouse central data system, which facilitates telecommunications services, is now ready to provide its services to Vietnam.

FPT IS is a joint stock company under the FPT Group, with eight subsidiary companies and a joint venture with Japan. It has more than 2,200 specialists in software, IT services, general businesses and electrical services.

Tuesday, October 12, 2010

Dollar struggles, hovers near 15-year low vs yen

Less-dire-than-expected U.S. payrolls data last week eased market anxiety over chances of a global slowdown and boosted demand for growth-linked currencies

Photo: Reuters

LONDON - The dollar dipped on Monday and looked set to test a 15-year low against the yen after shedding gains made after U.S. jobs data, while better risk appetite kept the euro near a three-week high versus the U.S. currency.

Less-dire-than-expected U.S. payrolls data last week eased market anxiety over chances of a global slowdown and boosted demand for growth-linked currencies like the Australian dollar.

"We are seeing some relief from fears about a double-dip recession in the U.S. helping risk sentiment and the euro," said Gareth Berry, currency strategist at UBS. "But whether this sentiment can be sustained or not is difficult to say."

U.S. non-farm payrolls fell 54,000, a much smaller drop than the predicted 100,000. Private employment, considered a better gauge of labour market health, increased 67,000.

Rising risk appetite has tended to help the euro and higher- yielding currencies in recent months, as investors increasingly see the dollar as a funding currency for investments on expectations of a prolonged period of near zero U.S. rates.

The euro was at flat for the day at $1.2890, having earlier risen to $1.2918, its highest since Aug. 12. Resistance is seen around $1.2932, the Aug. 12 high.

Market participants said they believed Asian central banks, excluding Japan, are converting dollars into euros after they intervene to rein in gains in their own currencies against the greenback, further boosting the euro.

The dollar index was down 0.1 percent at 82.02 with support at 81.82 -- the 50 percent Fibonacci retracement of the index's rise from 80.085 to a high of 83.559, in August.

Yen long positions trimmed

The dollar also ceded ground against the yen, dropping 0.25 percent to 84.07 yen, not far from last month's 15-year low of 83.58. It had risen to 85.23 after the jobs data, but quickly erased the gains.

Dollar/yen has been very highly correlated with U.S. bond yields in recent months. The lower U.S. yields are, the cheaper the dollar is against the yen, as lower yields tend to discourage investment in the dollar from Japan.

In the past month, the yield on the benchmark 10-year U.S. Treasury note has shed 12 basis points, while the dollar/yen has fallen over 1.5 percent during the same period.

Investors have also bought yen in the past few months as they tend to favor currencies of countries with a current account surplus when they want to avoid risk. The rise had caused headaches for Japanese policymakers battling deflation at home and counting on exports to jump-start the economy.

Speculators trimmed their long positions on the yen last week but still have big yen long positions, data from the U.S. Commodity Futures Trading Commission showed on Friday. Net long positions were cut to 49,904 from 51,069 contracts.

Berry at UBS said hedge funds were selling dollar/yen while other asset managers were emerging as bit buyers. He added hedge funds believed U.S. data would remain soft, putting downward pressure on U.S. yields and dollar/yen.

On Saturday, Japanese Finance Minister Yoshihiko Noda said Tokyo would take decisive steps to stem the yen's rise when needed while suggesting coordinated currency intervention in the market was a difficult option.

"For intervention to work, it has to be coordinated and it does not look that the U.S. is prepared for that," said Bilal Hafeez, foreign exchange strategist at Deutsche Bank.

"So going solo by the Japanese authorities could work for a day, but unlikely beyond that. We are looking for the dollar/yen to fall to 80 yen in the medium term."

Dollar struggles, hovers near 15-year low vs yen

Less-dire-than-expected U.S. payrolls data last week eased market anxiety over chances of a global slowdown and boosted demand for growth-linked currencies

Photo: Reuters

Less-dire-than-expected U.S. payrolls data last week eased market anxiety over chances of a global slowdown and boosted demand for growth-linked currencies like the Australian dollar.

U.S. non-farm payrolls fell 54,000, a much smaller drop than the predicted 100,000. Private employment, considered a better gauge of labour market health, increased 67,000.

The euro was at flat for the day at $1.2890, having earlier risen to $1.2918, its highest since Aug. 12. Resistance is seen around $1.2932, the Aug. 12 high.

The dollar index was down 0.1 percent at 82.02 with support at 81.82 -- the 50 percent Fibonacci retracement of the index's rise from 80.085 to a high of 83.559, in August.

Yen long positions trimmed

In the past month, the yield on the benchmark 10-year U.S. Treasury note has shed 12 basis points, while the dollar/yen has fallen over 1.5 percent during the same period.

"For intervention to work, it has to be coordinated and it does not look that the U.S. is prepared for that," said Bilal Hafeez, foreign exchange strategist at Deutsche Bank.

"So going solo by the Japanese authorities could work for a day, but unlikely beyond that. We are looking for the dollar/yen to fall to 80 yen in the medium term."

Tuesday, October 5, 2010

Asia stocks rise as US data soothes fears

Photo: Reuters

TOKYO - Asian stocks rose to a two-week high, with Japan's Nikkei briefly rising more than 2 percent, as strong US manufacturing data further soothed worries about the global economy.

The dollar and the yen began the day on the defensive, while commodities gained, helping make materials shares some of the strongest performers across the region as gold steadied after a two-month top hit on Wednesday.

The Institute for Supply Management said its index of US factory activity rose to 56.3 in August from 55.5 in July, much higher than forecast by economists.

Coming on the heels of strong Chinese manufacturing data and stronger-than-expected growth in Australia, the numbers eased investor fears about the pace of global economic recovery and helped Wall Street to its best day in eight weeks.

But gains in Asian stocks, which were also boosted by gains in tech shares, appeared capped by wariness about whether the global economy is truly on the path to recovery, as well as concern about closely watched US nonfarm payrolls data on Friday.

"It's too early to say worries about a double-dip recession in the economy have been wiped away just because China's PMI, Australia's GDP and US data weren't bad," said Masahiko Sato, an executive director at Nomura Securities' equity marketing department.

"But stocks may become more resilient to poor economic indicators going forward and gain further if money that had shifted to bonds on extreme concern over the economy comes back to equities, early signs of which have likely appeared in US, Germany and U.K. bonds after yesterday's data."

The MSCI index of Asia Pacific stocks outside Japan rose 0.8 percent to its highest level since mid-August.

Japan's benchmark Nikkei rose more than 2 percent at one point, moving further away from a 16-month low hit on Wednesday, helped by what some market players said was buying by domestic institutional investors at lows and buying of futures by foreign players.

But the Nikkei pared gains to 1.2 percent by midday. It lost 7.5 percent in August and is down roughly 14 percent on the year.

Seoul shares rose 0.3 percent, boosted by tech stocks, with market players saying foreign investors, cheered by the rise on Wall Street, could turn strong buyers.

Australian stocks rose 0.8 percent to a three-week high, with miners such as Rio Tinto gaining after copper prices rose to a four-month high.

Steady dollar

The dollar index, a gauge of the greenback's performance against a basket of six major currencies, was steady on the day at 82.528 after falling 0.9 percent on Wednesday, marking its biggest one-day fall in six weeks.

The dollar edged down 0.2 percent to 84.27 yen but still stayed above a 15-year low of 83.58 yen hit last week.

Through the ISM data boosted higher-yielding currencies such as the Australian dollar, investors have now turned hesitant about taking fresh positions ahead of the European Central Bank's policy meeting later in the day and Friday's closely watched monthly US job report, a trader said.

Spot gold edged up to $1,246.70 an ounce, after hitting $1,254.65 on Wednesday, its highest since June 28.

Oil held onto most of the previous session's gain of 2.8 percent after the strong manufacturing data in top consumers the US and China raised hopes record oil inventories will draw down.

US crude for October delivery was steady at $73.91 a barrel after a jump of nearly $2 on Wednesday.

Sunday, September 26, 2010

Asian markets slip, yen rises on weak US data

Photo: Reuters

Japan's multi-billion-dollar plans to boost its economy and rein in the yen were shrugged off Tuesday as a fresh set of poor data out of the US weighed on Asian markets.

Tokyo plummeted to a 16-month low a day after the government unveiled an $11 billion package of stimulus measures aimed at kick starting growth and spending in the nation, which is being hammered by a severe bout of deflation.

That came hours after the central bank announced a fresh batch of monetary easing aimed at taming the soaring yen which is hampering the export sector that is key the economy's health.

However, traders were unimpressed with the efforts and, with weak consumer figures in the US pointing to a global slowdown, they bought into the safe-haven yen, sending it up against the dollar and euro.

The dollar, which hit a 15-year low last week, slipped to 84.25 yen in Tokyo morning trade, from 84.55 late Monday in New York. The greenback had reached the 86 yen level in anticipation of the Bank of Japan announcement Monday.

The euro fell to 106.60 yen from 107.14 in New York and to $1.2650 from $1.2663. It had hit a record low of 1.2931 Swiss francs on weak stock markets, as investors bailed out of riskier assets but it later recovered to 1.2950.

The strong yen hit exporters, with Tokyo's Nikkei index diving 3.55 percent, or 325.20 points, to 8,824.06, its lowest since April last year.

Sydney fell 1.09 percent, or 48.5 points, to end at 4,404.2, while Hong Kong shed 0.97 percent, or 200.73 points, to end at 20,536.49.

Shanghai was 0.52 percent lower, losing 13.87 points to 2,638.80.

"Some market players say the measures announced yesterday had only a limited impact but I believe it was better than no action," said Toshihiko Sakai, senior dealer at Mitsubishi UFJ Trust and Banking.

"It was like the BoJ letting off the first arrow and the government the second, before the third arrow -- intervention -- is shot off," Sakai said, while adding it was unlikely that monetary authorities will step in markets in the near future.

Investors got an anemic lead from Wall Street, where the Dow fell 1.39 percent after the Commerce Department released data showing July consumer spending rose 0.4 percent and incomes rose 0.2 percent.

The data was largely in line with forecasts but analysts said the numbers were disappointing as they showed spending outpacing income.

Consumer spending is a key driver of US economic growth, usually accounting for two-thirds of output.

Markets brushed off last week's comments from Federal Reserve head Ben Bernanke that the central bank would step in to support the US economy from falling sharply.

Eyes will now be on key US economic data due to be released this week, including industrial manufacturing numbers on Wednesday and key employment figures on Friday, both expected to indicate an economic slowdown.

Oil prices fell, with New York's main contract, light sweet crude for delivery in October, shedding 68 cents to $74.02 a barrel in the afternoon.

Brent North Sea crude for October delivery slipped 62 cents to $75.98.

Gold closed at $1,234.80-$1,235.80 an ounce, slightly down from Monday's closing price of $1,236.30-$1,237.30.

Asian markets slip, yen rises on weak US data