SYDNEY (Reuters) — Asian share markets
struggled to scrape together some gains on Wednesday following a
flat finish on Wall Street and as concerns over opaque policy moves
in China kept investors on edge amid a drought of major economic
data.
Chinese share markets and the yuan stabilized after sharp falls on
Tuesday, with Shanghai adding 0.1 percent <.SSEC>. MSCI's broadest
index of Asia-Pacific shares outside Japan <.MIAPJ0000PUS> crept
ahead by 0.28 percent, while south Korea, Taiwan and the Philippines
were all fractionally firmer.
In Tokyo, the Nikkei 225 <.225> pared early losses to be off 0.2
percent, which follows a 1.4 percent gain on Tuesday.
"For the rest of the week, the Nikkei may see directionless trade
and a lack of volume because investors need more catalysts to take
positions," said Masashi Oda, chief investment officer at Sumitomo
Mitsui Trust Bank.
Panasonic Corp <6752.T> broke from the pack and jumped 5 percent on
reports the firm was inviting several Japanese suppliers to join it
in investing in a U.S. car battery plant it plans to build with
Tesla Motor Inc TSLA.O. [ID:nL3N0LU4IV]
Economic data from the United States had been too mixed to offer any
lead. A closely watched housing survey showed home prices rose
slightly more than expected in December, though February consumer
confidence fell short of expectations.
<TOP/CEN>
The cautious tone in markets was also warranted ahead of testimony
from Federal Reserve Chair Janet Yellen slated for Thursday, where
she is bound to draw questions on the recent spate of soft U.S.
economic news and what it might mean for policy.
The Dow <.DJI> ended Tuesday 0.17 percent lower, while the S&P 500
<.SPX> lost 0.13 percent a day after touching a record high.
Yields on 10-year U.S. Treasury notes were steady at 2.71 percent
after dipping about 4 basis points overnight, leaving them roughly
in the middle of the recent 2.57 to 2.79 percent trading range.
Gold edged back to $1,340.00 an ounce and away from a four-month top
at $1,343.40.
In currencies, dealers reported scant activity ahead of the month
end and a slate of major global data next week. The dollar inched up
on the yen to 102.33, but could make no headway on the euro at
$1.3742.
The single currency has been corralled in a $1.3685-$1.3773 range
for the past six sessions.
After falling sharply on Tuesday, China's yuan was looking more
stable so far on Wednesday. It was quoted at 6.1283 per dollar,
little changed from Tuesday's close.
Dealers suspect the People's Bank of China has engineered the recent
decline in its currency to inject more two-way volatility into the
market and wrong foot speculators that had amassed huge positions
wagering on its continued rise.
The Chinese currency has been a favorite among emerging market
currencies in 2013, gaining nearly 3 percent even as most of its
peers depreciated against the dollar. Most analysts expect it to
appreciate another 2-3 percent this year, but the change in
direction has rattled confidence.
Some analysts believe the PBOC may be preparing the markets for more
reforms.
"Putting such a warning shot over the bows of the FX community could
also be seen as a sensible move ahead of any possible widening of
the CNY's trading band," said Patrick Perret-Green, an analysts at
Australia New Zealand Bank.
ANZ believes the band will be widened to 2 percent from the current
1 percent within the next couple of months, a move toward
liberalization that should be seen as a positive step.
Yet he also cautioned that the weakness was not confined to the yuan
and equities. Prices for copper and steel had fallen sharply while
money markets rates were broadly lower, a risk-off shift that
suggested growing worries about the economy.
"So far, the reaction of other global markets has been remarkably
relaxed, if not perverse. It is questionable how long this can
persist."
In oil markets, Brent crude eased 15 cents to $109.36 a barrel,
while U.S. oil lost 21 cents to
$101.62. <O/R>
Chinese share markets and the yuan stabilized after sharp falls on
Tuesday, with Shanghai adding 0.1 percent <.SSEC>. MSCI's broadest
index of Asia-Pacific shares outside Japan <.MIAPJ0000PUS> crept
ahead by 0.28 percent, while south Korea, Taiwan and the Philippines
were all fractionally firmer.
