Asian stocks mostly softened Monday to pare monthly gains, although Japanese shares got a lift from the government’s intervention in the foreign-exchange market to send the yen sharply lower.
After trading in negative territory early in the session, Japan’s Nikkei Stock Average JP:NIK +0.51 percent swung sharply higher on the yen move and ended the morning session with a 0.5 percent gain.
Reports from the region quoted Japanese Finance minister Jun Azumi as subsequently confirming that his ministry had ordered the Bank of Japan to conduct the intervention – the first such move since August.
“The Bank of Japan has been very clear that there were talks about intervention – it was always just about timing,” said Annette Beacher, head of Asia-Pacific research at TD Securities.
Exporters swung higher or cut losses in Tokyo after the intervention reports.
Mazda Motor Corp. JP:7261 +1.20 percent M +0.17 percent rose 1.2 percent and Toyota Motor Corp. JP:7203 +2.17 percent TM -0.23 percent gained 2.2 percent.
Honda Motor Co. shares JP:7267 -0.80 percent HMC -0.22 percent traded down 0.8 percent, pulling back from an earlier loss of more than 3 percent after a report in the Nikkei business daily that the company would need to replace machinery at its Thailand plant due to flood damage there, with the facilities potentially remaining shut for six months.
Shares lower ex-Japan
Across Asia, other markets were muted. Hong Kong’s Hang Seng Index HK:HSI -0.74 percent lost 0.3 percent, while the Shanghai Composite Index CN:000001 -0.30 percent traded flat.
Australia’s S&P/ASX 200 index AU:XJO -0.68 percent declined 0.5 percent, and South Korea’s Kospi KR:0100 -0.60 percent lost 0.4 percent on the last trading day of October.
Despite the softening Monday, Asian stocks were on track for monthly gains ranging from 4.5 percent for the Nikkei Average to 13.3 percent for the Hang Seng Index.
Stocks gained during October in anticipation of a European plan to address its debt problems. The plan was announced last week and was generally welcomed by markets, although many details remained to be announced.
“With more questions than answers markets will be hungry for further details over coming weeks, and until then, it is difficult to see risk appetite stretching too far,” Credit Agricole strategists said.
“The firewall to protect countries such as Italy and Spain may still be insufficient, given that the use of the European Central Bank to provide unlimited support has been ruled out,” Credit Agricole said.
European shares had edged lower Friday after Italy’s borrowing costs surged at an auction. US shares ended on a mixed note Friday. Read more on Europe markets.
Banks were mostly lower on Monday in Asia, with Westpac Banking Corp. AU:WBC -0.62 percent WEBNF +10.46 percent down 0.9 percent, and Macquarie Group Ltd AU:MQG -0.60 percent MQBKY -0.56 percent lower by 0.7 percent in Sydney.
In Hong Kong, Agricultural Bank of China Ltd HK:1288 -3.89 percent ACGBF +2.70 percent CN:601288 0.00 percent lost 3.6 percent, while China Construction Bank Corp. HK:939 -1.71 percent CICHF +1.33 percent CN:601939 +0.42 percent fell 1.4 percent after its quarterly results fell short of analysts’ expectations. See report on CCB earnings.
Among financial gainers, Aozora Bank Ltd shares JP:8304 +3.08 percent added 3.1 percent in Tokyo after the bank hiked its fiscal half-year and full-year profit forecasts.
Australian airline Qantas Airways Ltd AU:QAN +4.21 percent QUBSF 0.00 percent jumped 4.5 percent, while rival Virgin Blue Holdings Ltd AU:VBA +6.94 percent VBHLF +7.02 percent climbed 5.6 percent.
Qantas, which is embroiled in a battle with labour unions, grounded its entire fleet on Saturday. That prompted a ruling that there will be 21 days of negotiations between the parties and that no industrial action can take place during this time frame.
Qantas said Monday that it will restart flights as soon as it has safety clearance. -By Sarah Turner