Asia report: Markets mixed as Japan beats GDP growth forecasts
Markets in Asia finished mixed on Friday, as investors digested surprisingly good data from Japan and fresh inflation information from China, while keeping an eye on developments in the ongoing trade war between Washington and Beijing.
In Japan, the Nikkei 225 was up 0.44% at 20,684.82, as the yen strengthened 0.25% against the dollar to last trade at JPY 105.81.
Of the major components on the benchmark index, automation specialist Fanuc was down 1.54%, fashion firm Fast Retailing lost 0.8%, and technology conglomerate SoftBank Group was 0.65% weaker.
The broader Topix index finished its session 0.35% higher in Tokyo, closing out the day at 1,503.84.
In fresh data out of Japan, the country’s economy enjoyed its third quarter of expansion on the trot, with GDP ahead 1.8% year-on-year in the three months through June - comfortably beating median estimates for growth of 0.4%.
Quarter-on-quarter GDP growth also beat expectations at 0.4%, while capital expenditure rose 1.5% over the prior quarter, and private consumption was 0.6% higher.
On the mainland, the Shanghai Composite lost 0.71% to close at 2,774.75, and the smaller, technology-heavy Shenzhen Composite was off 1.27% at 1,479.86.
Economic data out of Beijing was near the top of the region’s agenda, with the country’s consumer price index rising 2.8% year-on-year in July - the fastest pace of inflation since February last year.
Food prices in China were a particularly sore point, rocketing 9.1% higher year-on-year, thanks to rapidly rising pork prices as the country grapples with outbreaks of African swine fever.
On the other side of the equation, the country’s producer price index fell further than expected, coming in down 0.3% year-on-year for July - the biggest annual decline in three years.
The closely-watched yuan renminbi saw its loose peg fixed weaker than CNY 7 against the dollar for the second time this week, with the People’s Bank of China setting the onshore yuan’s reference point at CNY 7.0136 for the day.
It allows the onshore yuan to trade at 2% either side of its daily peg.
The currency weakened beyond the psychologically important CNY 7 mark against the dollar for the first time since the 2008 global financial crisis on Monday, leading to the US Treasury Department to officially label the country a ‘currency manipulator’.
“Escalating [the] trade war is all the US got from imposing a 10% tariff on additional $300bn worth of Chinese imports, from calling China a currency manipulator and most recently from holding off on giving licenses to companies wishing to do business with Chinese telecommunications giant Huawei,” said London Capital Group senior market analyst Ipek Ozkardeskaya.
“China said that it won’t buy US farm products in return.
“Now it is up to the Federal Reserve to clean up the mess.”
South Korea’s Kospi was 0.89% firmer at 1,937.75, while the Hang Seng Index in Hong Kong slid 0.69% to 25,939.30.
Both of the blue-chip technology stocks were in the green in Seoul, with Samsung Electronics ahead 1.17%, and chipmaker SK Hynix 1.38% firmer.
Oil prices were higher as the region entered the weekend, with Brent crude last up 1.34% at $58.16 per barrel, and West Texas Intermediate rising 1.28% to $53.22.
In Australia, the S&P/ASX 200 was 0.25% higher at 6,584.40, while across the Tasman Sea, New Zealand’s S&P/NZX 50 slipped 0.01% to close at 10,873.21.
Both of the down under dollars were marginally stronger on the greenback, with the Aussie last ahead 0.09% at AUD 1.4688, and the Kiwi advancing 0.13% to NZD 1.5412.