Nikkei soars; other markets stall
Reuters, AP and AFPLONDON/HONG KONG--Japan's benchmark stock index soared on its first trading day of the new year Friday, as investors reacted to a weakening yen and Washington's temporary skirting of the so-called fiscal cliff.
January 5, 2013, 12:06 am TWN
But other world markets stalled as enthusiasm faded over the last-minute budget deal reached in Washington to avoid steep, automatic tax increases and spending cuts that would have taken effect Tuesday. The measure, however, was largely seen as crisis avoidance — and puts off hard decisions about how to reduce government spending and deal with America's massive debt.
European stocks were mostly lower in early trading. Britain's FTSE 100 was marginally lower at 6,045.75. Germany's DAX shed 0.1 percent at 7,745.77 and France's CAC-40 was 0.3 percent lower at 3,710.51. Wall Street looked set for a high open, however, with Dow Jones futures rising 0.1 percent to 13,331 and S&P 500 futures adding nearly 0.2 percent to 1,456.
In Tokyo, the Nikkei 225 jumped 2.8 percent to 10,688.11, its highest closing in 22 months. Much of the enthusiasm for Japanese shares comes with the steadily weakening currency, a big help to Japanese companies that sell abroad.
Elsewhere, however, investor fervor wilted. Hong Kong's Hang Seng index fell 0.3 percent to 23,331.09. South Korea's KOSPI lost 0.4 percent to 2,011.94, while Australia's S&P/ASX 200 shed 0.4 percent to 4,723.80.
Hong Kong shed 0.29 percent, or 67.51 points, to 23,331.09.
And Shanghai, which was also back for the first time this year, closed up 0.35 percent, adding 7.86 points to 2,276.99.
Wall Street stocks tumbled on Thursday after a transcript of the last meeting of the U.S. Federal Reserve unveiled a divided opinion among central bankers over how long the Fed should keep buying bonds to support the economy.
The losses came despite a monthly employment survey by payroll provider ADP showing businesses added 215,000 jobs last month, the most in 10 months and much higher than November's total of 148,000.
“Risk assets largely weakened overnight as the less dovish FOMC minutes more than offset earlier gains triggered by a good job report. Indeed, better-than-expected improvement in the job market may fan expectation for an earlier removal of quantitative and monetary easing,” analysts at Credit Agricole CIB said in a market commentary.
Wall Street was expected to open slightly higher though, with S&P 500 futures up 0.1 percent and contracts for the Dow Jones and the Nasdaq 100 up 0.2 percent.
U.S. stocks will largely depend on the non-farm payrolls report due at 1330 GMT and any clues it gives on the health of the U.S. and global economies.
Analysts polled by Reuters expect a 150,000 rise in jobs, with unemployment holding steady at 7.7 percent. However, after a better-than-expected ADP employment report on Thursday, many may now be betting on an above-consensus jobs number.
Bund futures slipped almost half a point to 143.12, having already fallen steeply from last week's close of 145.64.
Benchmark U.S. Treasury yields continued their climb, hitting an eight-month high of 1.96 percent, while in Asia, 10-year Japanese government bond yields touched a 3-1/2-month high of 0.83 percent.
Gold was at US$1,646.80 at 0830 GMT compared with US$1,682.75 late Thursday.
In other markets:
— Taipei fell 30.85 points, or 0.39 percent, to 7,805.99.
— Manila rose 0.63 percent, or 37.40 points, to 5,971.45.
— Wellington fell 0.18 percent, or 7.33 points, to 4,075.04.