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Dec 26, 2016

Asian Markets at Close Report on December 26, 2016: Nikkei Weighed by Autos, Bucking Mostly Higher Asia Finish

Suryatapa Bhattacharya

TOKYO — Asian shares ended broadly higher on Monday despite thin trading volumes because of the Christmas holidays, with some major markets in the region still closed.

Japan’s Nikkei Stock Average fluctuated NIK, +0.09% , closing down 0.2% after it briefly turned up 0.01% to 19432.48 in afternoon trading. Meanwhile, the Shanghai Composite Index SHCOMP, +0.40%  reversed morning trading losses and closed higher 0.4%. Elsewhere, Korea’s Kospi SEU, +0.10%  ended higher 0.09% and Taiwan’s stock exchange was 0.4% higher.was up 0.01% and Taiwan’s stock exchange was 0.2% higher.
Markets in Australia, New Zealand, Hong Kong, Indonesia, Malaysia, Philippines and Singapore were closed.
In Japan, auto stocks declined because of a stronger yen due to profit-taking pressure. A strong yen threatens to reduce profits exporters earn abroad. Toyota 7203, +0.06% TM, +0.20%  ended lower 1.4% at ¥6,991,while Mazda 7261, +0.28%  fell 1.9% to ¥1,974.5 and Honda 7267, +0.29%  declined 2.1% to ¥3,495. The Topix transportation subindex was down 1.5%. The yen USDJPY, +0.26%  was at 117.04 compared with 117.49 late Friday in New York.
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Among the gainers in Japan, Nintendo 7974, -1.71%  ended higher 4.06% at ¥24,555 on news that it will release three new smartphone games next year and that the company could gain from its push into more mobile products. Nintendo’s mobile game partner DeNA also rose 2.7% to ¥2,576.
“The stock market thinks they can make a profit based on Nintendo’s new titles,” said Eiji Maeda, an analyst with SMBC Nikko Securities in Tokyo.
In China, the Shanghai Composite Index SHCOMP, +0.40%  , after sliding more than 1% in morning trading Monday over concerns about Beijing’s monetary policy to deflate various risky asset bubbles, rebounded and ended higher as investors turned their attention to increased government spending on infrastructure to boost the economy. Construction firms led the gains, followed by brokerages that typically benefit from a stronger broader market.
Easing anxieties in the bond market, which suffered a series of selloffs in recent weeks, also raised investors’ spirits. The yield on the benchmark 10-year Chinese government paper is down .032 percentage point at 3.15%. Yields drop when bond prices rise.
“The big worry is the strength of the property market. There are signs that the government is quite determined to maintain a tough stance to deter speculative investment in this sector,” said Zhang Gang, senior analyst at Central China Securities.
China’s top leadership has in recent weeks expressed dissatisfaction with the overheated housing market, vowing to establish a long-term mechanism that ensures healthy development for the sector.
— Shen Hong contributed to this article.