Investing.com – Asian stocks were mixed on Thursday as foreign bond buying increased in Japan and the markets awaited U.S. Federal Reserve''s chief Janet Yellen’s testimony to the U.S. Senate later in the day.
In Japan, the Ministry of Finance released weekly international transactions in securities data that revealed that foreign bond buying increased to ¥598.8 billion from ¥503.5 billion.
Shinsei Bank rose 5% after the news that a subsidiary of General Electric will pay it $1.7 billion under an agreement related to interest payments made by customers of a Japanese consumer-finance business GE Capital sold to Shinsei. Panasonic rose 3.8%, Tokyo Electron was up 2.2%, Sumitomo Realty & Development fell 3.7%, Daiwa House were down 1.6%.
In Australia, Qantas Airways fell 6.7% after the company reported A$235 million net loss for the six months through December. In the same period last year, the airlines had reported a profit of A$109 million profit in the same period last year. The company also said that it would cut jobs, defer aircraft deliveries and sell airport terminal leases.
Earlier the Australian Bureau of Statistics reported that capital expenditure in the fourth quarter fell by 5.2% against an expectation of 1%. Capex in all the three major industry groups fell in the latest quarter with manufacturing capex down once again after rebounding in the third quarter. The revised estimate for 2013-14 capex was little-changed at A$167.1 billion and in line with expectations, but the first estimate for next year''s capex intentions showed a 27% drop in mining capex, indicating investments into the resources sector are likely to fall sharply.
Meanwhile in New Zealand, January’s trade surplus widened to NZ$306 million against the expectation of NZ$216 million. This was highest ever surplus for any January month. In December the surplus was NZ$493 million. Exports in January were NZ$4.08 billion, out of which NZ$1.2 billion went to China and NZ$556 million to Australia.
Japan''s Nikkei index rose 0.14%, the Shanghai Composite gained 0.56% and Hong Kong''s Hang Seng rose 0.72%. Australia''s S&P/ASX index fell 0.48%.
The People''s Bank of China set the yuan''s central parity rate against the U.S. dollar at 6.1224 Thursday, lower than Wednesday''s 6.1192. The market has been closely watching the yuan parity rate as the PBOC attempts to unify onshore and offshore quotes.
Turmoil in the Chinese currency and stock markets sent investors running for the cover of the bond market on Wednesday, which marked the first time spot yuan has traded stronger than its previous close since the previous Wednesday. Traders said "Big Four" state banks aren''t buying dollars as aggressively as they have been, though it''s unclear if they''ve been told to hold off on orders from the PBOC.
On Wednesday, strong U.S. home sales numbers sent Wall Street stocks gaining though profit taking allowed for choppy trading, as investors jumped to the sidelines to await Yellen''s Thursday testimony.
At the close of U.S. trading, the Dow Jones Industrial Average rose 0.12%, the S&P 500 index ended the day flat, while the Nasdaq Composite index rose 0.10%.
The Commerce Department reported earlier that new home sales jumped 9.6% to 468,000 units in January, blowing past market expectations for a 1% decline to 400,000.
New home sales in December were revised up to 427,000 units from a previously reported 414,000 units.
The numbers renewed perceptions that a wave of soft factory, jobs and other economic indicators hitting the wire this year reflected rough winter weather that disrupted commerce and not an underlying softening of demand.
Investors were looking ahead to testimony by Federal Reserve Chair Janet Yellen on Thursday for insight as to whether or not the U.S. central bank will maintain the current pace of its cuts to monthly bond purchases.
Markets were expecting that Yellen will echo past statements that the U.S. monetary authority will continue rolling back its asset purchase program, as long as the economy improves as expected, though uncertainty ahead of time sent investors to the sidelines and allowed for choppy trading.
The Fed is currently buying $65 billion in Treasury and mortgage debt a month to suppress interest rates to spur recovery by suppressing borrowing costs to fuel stock market gains.
Monetary authorities hope rising stocks will prompt companies to raise capital and invest in projects, thus creating jobs in the process and lower the nation''s stubbornly high jobless rates.
Capping stock gains were concerns that an absence of Fed liquidity injections that lower interest rates may yank equities of a monetary crutch they enjoy when the Fed intervenes, especially in an economy still battling potholes along its road to recovery.
On the earnings front, retailer Target and home improvement retailer Lowe''s released earnings that drew applause from the markets.
Leading Dow Jones Industrial Average performers included Wal-Mart Stores, up 1.96%, UnitedHealth, up 0.97%, and DuPont, up 0.92%.
The Dow Jones Industrial Average''s worst performers included McDonald''s, down 0.76%, Exxon Mobil, down 0.54%, and AT&T, down 0.51%.
On Thursday, the U.S. is to release data on durable goods orders and its weekly report on initial jobless claims.