HONG KONG (AFP) – Asian markets were mixed Thursday following a record close on Wall Street, while profit-taking sent Japan’s Nikkei to its first loss since last week and the dollar retreated after breaking 115 yen.
Wall Street had provided a strong lead, with record closes for the Dow and S&P 500 after Republicans took control of the US Congress.
Focus will now be on the release Friday of US jobs data, which will give the latest snapshot of the economy and give an idea about the Federal Reserve’s plans for interest rates.
Tokyo slipped 0.86 per cent after surging more than 10 per cent since last Wednesday, helped by the Bank of Japan’s monetary easing announcement. The Nikkei lost 144.84 points to finish at 16,792.48.
Sydney slipped 0.21 per cent, or 11.8 points, to 5,506.1 but Seoul rose 0.26 per cent, or 5.05 points, to close at 1,936.48 and Shanghai added 0.27 per cent, or 6.61 points, to 2,425.86. Hong Kong closed down 0.20 per cent, or 46.31 points, to 23,649.31 – the fourth straight day of losses.
US shares jumped after Republicans ousted Democrats as the main party in the Senate for the first time in eight years, raising hopes the gridlock that has paralysed Washington for years could be broken.
Analysts said the news would boost the prospects for tax reform, a key oil pipeline and immigration reform. Democratic President Barack Obama said he was “eager to work with the new Congress to make the next two years (of his presidency) as productive as possible”.
Traders also welcomed data from payroll company ADP showing the US private sector added 230,000 jobs in October, above the 220,000 projected by analysts.
The Dow jumped 0.58 per cent to a new record, while the S&P 500 also hit an all-time high after tacking on 0.57 per cent. The Nasdaq was marginally lower, losing 0.06 per cent.
The dollar paused in its rally against the yen, which was sparked by the BoJ’s surprise decision Friday to widen its already huge monetary base, effectively printing more money.
In Tokyo foreign exchange trade the greenback hit a seven-year high of 115.51 yen before easing to 114.40 yen. While that is below the 114.69 yen in New York Wednesday afternoon, it is still sharply higher than the 114.06 yen in Asia earlier Wednesday.
The yen was also soft against the euro. The single currency sat at 143.20 yen against 143.18 yen in US trade.
The euro was worth $1.2520 compared with $1.2484 in New York.
However, the common currency continues to face pressure after the European Commission this week slashed its 2014 and 2015 growth forecasts for the eurozone.
On oil markets, crude futures added to Wednesday’s gains that came after a US inventories report showed a smaller-than-expected increase in supplies.
US benchmark West Texas Intermediate for December delivery rose 18 cents to $78.86 while Brent crude for December was up 13 cents to $83.08 in afternoon trade.
The gains add to those seen late Wednesday when WTI jumped $1.49 and Brent climbed 13 cents.
Gold was $1,144.60 an ounce from $1,148.34 late Wednesday.