Japanese Stocks Swing While Crude Extends Rally: Markets Wrap

UBS's Yu: Emerging Markets Underappreciated

Japanese stocks fluctuated and the yen halted a four-day advance, while oil continued the longest winning streak in four months as major financial markets began to reopen after a long holiday weekend.

Japan’s Topix index swung between gains and losses after a three-day decline, as data showed consumer prices dropped for a ninth straight month in November. The yen slipped after climbing 0.7 percent over the previous four sessions. Crude climbed for a seventh straight session before OPEC and other producing nations start reducing output. Financial markets in Australia, New Zealand and Hong Kong are shut on Tuesday, while those in the U.S. and most of Europe will resume trading after a holiday Monday.

Trading is expected to be thin this week as financial markets close out a volatile year. U.S. equities are trading near a record, the dollar is around a multiyear high and crude oil has climbed to a 17-month peak as traders have powered past shocks from the Brexit vote in the U.K. to Donald Trump’s victory in the U.S. presidential election.

“The financial markets seem to have already priced in expectations toward a Trump presidency, and are shifting toward a market that’s waiting to gauge his actual policies," said Hideyuki Ishiguro, a senior strategist at Daiwa Securities Co. in Tokyo. “We also have a lack of market participants with overseas markets closed."

Stocks

  • Japan’s Topix was little changed as of 9:43 a.m. after falling as much as 0.3 percent and rising less than 0.1 percent. The benchmark gauge is down 0.6 percent for the year, while the Nikkei 225 Stock Average has gained 1.9 percent. Japan’s consumer prices dropped in November while household spending fell, underscoring the challenge the Bank of Japan faces in stoking inflation.
  • Toshiba Corp. dropped as much as 16 percent on reports it may book a loss of as much as 500 billion yen ($4.3 billion) on its U.S. nuclear operations.
  • South Korea’s Kospi Index added 0.2 percent, advancing for a third day.
  • Futures on the FTSE China A50 fell 0.3 percent in most recent trading. The Shanghai Composite Index rose 0.4 percent on Monday. Earlier in the day, it fell to the lowest since October as reports of further curbs on the property market weighed on the sector.
  • Global stocks were little changed last week after reaching an almost 17-month high Dec. 13.

Currencies

  • The yen weakened 0.2 percent to 117.32 per dollar. While the currency gained 0.5 percent last week, it’s still about 15 percent from a high in August. 
  • The South Korean won fell 0.3 percent against the dollar, after strengthening for the first time in nine sessions on Monday.

Commodities

  • Crude futures advanced 0.3 percent to $53.16 a barrel in New York. Prices are set to recover next year as supply cuts help to rebalance an oversupplied market, Saudi Arabia’s Energy Minister Khalid Al-Falih said last week. OPEC and 11 nations from outside of the group including Russia have agreed to trim about 1.8 million barrels a day from January.
  • Gold was little changed at $1,132.63, trading near the lowest level since February.
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