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Asian Markets at Close Report

European Markets at Close Report

Aug 22, 2016

Asian Markets at Close Report, by MarketWatch on August 22, 2016: Asian Markets Choppy as Investors Eye Fed



Asian shares ended mixed on Monday, with traders braced for hawkish commentary from U.S. Federal Reserve officials at its annual conference this week.

The Nikkei Stock Average NIK, +0.32%  closed 0.3% higher after the yenUSDJPY, +0.41%  slipped against the U.S. dollar. A weaker yen makes Japanese exports cheaper for other currency holders.
Hints late last week from several Federal Reserve officials that a U.S. interest-rate rise was still possible this year sent the dollar DXY, +0.07%  much higher against regional currencies on Monday.
Against the dollar, the Korean won KRWUSD, -0.679311%  was down 0.9%, the New Taiwan Dollar TWDUSD, -0.600478% MYRUSD, -0.4687%  fell 0.6%, and the Malaysian Ringgit MYRUSD, -0.4687% was down 0.5%.
Investors are also looking ahead to possible comments from Bank of Japan Governor Haruhiko Kuroda on Tuesday, with analysts expecting him to expand on his earlier remarks that the BOJ has room to cut rates.
Meanwhile, China’s central bank set the yuan’s CNYUSD, -0.0045%  benchmark rate at 0.7% lower against the U.S. dollar, in the biggest depreciation move for the yuan since the Brexit vote in June.
But the broad weakening of Asian currencies did little to drive equities markets elsewhere in the region.
Australia’s S&P/ASX 200 XJO, -0.21% dropped 0.2%, while Korea’s Kospi SEU, -0.68%lost 0.7%. Hong Kong’s Hang Seng HSI, +0.26% rose 0.3% and the Shanghai Composite Index SHCOMP, -0.75%  ended down 0.8%.
“Half of the market believes there will be another rate increase [in the U.S.] either in December or January,” said Mitsushige Akino, chief fund manager at Ichiyoshi Asset Management.
The prospect for September is uncertain, he said. “That means a higher yen environment is likely to continue.”
Also weighing on the markets Monday were oil prices, which fell in morning Asian trade.
Data on Friday showed an increase in the number of active oil rigs in the U.S. last week, spurring fears that the recent rally in oil prices attracted more U.S. shale gas producers to return to the oil patch, according to ANZ.
The strong dollar is also keeping oil prices suppressed, said the bank.
“The market is likely to remain in a tight range this week with a lack of data providing little insight into China’s industrial activity,” ANZ said.


U.S. crude CLU6, -2.60%  dropped 1.5% to $47.81 a barrel, while BrentLCOV6, -2.85%  slumped 1.7% to $50 a barrel.