Asian stock markets were broadly higher on Wednesday, with markets in Japan rallying sharply as the yen crossed above the 105.0-level against the U.S. dollar, boosting sentiment.
During late Asian trade, Hong Kong''s Hang Seng Index jumped 1.35%, Australia’s ASX/200 Index ended 0.02% lower, while Japan’s Nikkei 225 Index closed up 1.94%.
Asia was given a positive lead from the U.S., where the Dow and S&P 500 closed higher following the release of encouraging trade deficit data.
The Commerce Department said in a report that the U.S. trade deficit narrowed to a four-year low of USD34.25 billion in November from a deficit of USD39.33 billion in October, as exports to China rose to an all-time high.
Investors were turning their attention to the minutes of the Fed’s December meeting, due for release later Wednesday, for indications on the possible timing of further reductions in the bank’s stimulus program.
In Tokyo, the Nikkei rallied above the 16,000-mark as traders monitored movements in the currency market.
USD/JPY rose to a session high of 105.08, moving off the previous day’s low of 104.16. A weaker yen increases the value of overseas income at Japanese companies when repatriated, boosting the outlook for export earnings.
Automakers Nissan and Honda saw shares rise 4.35% and 1.2% respectively, while Sony and Sharp advanced 1.4% and 2.45%.
Japanese megabanks were also higher with shares of the nation’s largest lender Mitsubishi UFJ Financial Group gaining 2.2%, while Mizuho Financial Group and Nomura Holdings added 3.5% and 4.6% respectively.
Index heavyweights Fast Retailing and Fanuc saw shares climb 2.1% and 2.4% respectively.
Elsewhere, in Hong Kong, the Hang Seng moved higher as gains in the nation’s blue-chip exporters boosted the benchmark index. Li & Fung rose 2.3%, while footwear major Belle International Holdings surged 14.2% after the company said it opened nearly 500 new retail outlets in mainland China in 2013.
Meanwhile, in Australia, the ASX/200 Index ended little changed as losses in the mining sector weighed. Fortescue Metals Group slumped 1%, while Rio Tinto and OZ Minerals fell 1% and 0.95% respectively.
Looking ahead, European stock market futures pointed to a modestly higher open. The EURO STOXX 50 futures pointed to a gain of 0.2% at the open, France’s CAC 40 futures added 0.2%, London’s FTSE 100 futures indicated a rise of 0.1%, while Germany''s DAX futures pointed to a gain of 0.25% at the open.
Germany is to release data on factory orders, while the euro zone is to produce data on the unemployment rate and a separate report on retail sales.
Across the Atlantic, U.S. equity markets pointed to a flat open. The Dow Jones Industrial Average futures pointed to a gain of 0.1%, S&P 500 futures were little changed, while the Nasdaq 100 futures indicated an increase of 0.1%.
The U.S. is to release the ADP report on private sector job creation, which leads the government’s nonfarm payrolls report by two days. Later in the day, the Federal Reserve is to publish what will be the closely watched minutes of its latest policy meeting.
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