Asia report: Markets ahead as traders digest central bank signals

Markets in Asia were higher across the board on Thursday, with a strong finish on Wall Street overnight giving the region reason to rise, as traders continued to digest a week of key central bank signals.

Japan’s Nikkei 225 was up 0.45% at 20,220.30, as the yen weakened against the dollar, last losing 0.26% to JPY 112.59.

The Toshiba memory chip circus played another matinee performance, as the conglomerate announced yet another delay to the sale of the valuable division, instead opting to take legal action against US memory giant Western Digital for supposedly interfering in the deal.

Western Digital had objected to Toshiba’s planned sale of the division to a Japanese state-backed consortium, as its SanDisk subsidiary was in joint venture with Toshiba at a manufacturing facility and wanted more of a say in the deal.

Shares in Toshiba finished down 3.69%.

Department store holding company J.Front Retailing rocketed 8.65%, after the group posted solid first quarter net profits, and Nomura maintained its ‘buy’ rating on the stock.

On the mainland, the Shanghai Composite added 0.46% to 3,187.90, and the smaller, technology-heavy Shenzhen Composite was 0.47% firmer at 1,892.27.

South Korea’s Kospi was up 0.55% at 2,395.66, while the Hang Seng Index in Hong Kong was ahead 1.1% at 25,965.42.

Investors in the region were still sifting through central bank signals, with European Central Bank president Mario Draghi’s comments on Tuesday reportedly being misinterpreted by the markets.

Reuters, citing unnamed sources, said Draghi had wanted to signal a tolerance for weaker inflation by the central bank, rather than an impending tightening of eurozone policy.

The Bank of England was also at the fore, after governor Mark Carney made comments about whether interest rates should rise “in the coming months”.

It was a pivot from his more dovish stance earlier in the month, when he called discussions about a rate rise in the UK ‘premature’.

Over the Atlantic, the governor of the Bank of Canada Stephen Poloz appeared on CNBC, saying the country’s interest rate cuts had “done their job”.

Oil prices were marginally ahead, with Brent crude last up 0.9% at $47.74 per barrel and WEst Texas Intermediate adding 0.97% to $45.18.

In Australia, the S&P/ASX 200 added 1.08% to close at 5,818.10, with the energy, information technology and materials subindexes all posting solid gains.

New Zealand’s S&P/NZX 50 finished ahead 0.8% at 7,685.45, led higher by local KFC, Pizza Hut, Starbucks and Carl’s Jr master franchise holder Restaurant Brands, which rose 3%.

Both of the down under dollars were stronger, with the Aussie last ahead 0.49% on the greenback at AUD 1.3025 and the Kiwi advancing 0.05% to NZD 1.3681.