Portfolio

Asia report: Markets mixed as Japan exports beat forecasts

By Josh White

Date: Wednesday 21 Jul 2021

Asia report: Markets mixed as Japan exports beat forecasts

(Sharecast News) - Stock markets in Asia closed in a mixed state on Wednesday, as investors reacted to a rebound on Wall Street overnight, and digested fresh economic data out of Japan and Australia.
In Japan, the Nikkei 225 was up 0.58% at 27,548.00, as the yen weakened 0.24% against the dollar to last trade at JPY 110.11.

Fashion firm Fast Retailing was down 0.9%, while among the benchmark's other major components, automation specialist Fanuc was up 0.36% and technology conglomerate SoftBank Group was 0.47% firmer.

The broader Topix index ended its session 0.82% by the end of trading in Tokyo, at 1,904.41.

Fresh data released on Wednesday showed exports from Japan growing by 48.6% year-on-year in June, beating expectations for 46.2% pencilled in by economists polled by Reuters.

"The result still was softer than we expected, considering the decent signal for ex-China demand from Korea's trade data," said Pantheon Macroeconomics senior Asia economist Miguel Chanco.

"On our adjustment, outbound shipments rose by 0.9% m/m last month, the weakest print since the February slip and well below the prior three-month average of around 4.0%."

Chanco said exports to the European Union were "the biggest letdown", with the June correction nearly erasing most of the jump in May, while demand from the United States remained fairly solid.

"Meanwhile, exports to China rebounded by 0.7% month-on-month, recouping part of the 1.3% drop in May; the bounce from Asia ex-China demand was more emphatic.

"Looking ahead, a correction in overall exports remains on the cards, as they remain well above the levels implied by external demand drivers," Chanco said.

"Headline year-on-year export growth should moderate more sharply in the coming months, as the lift from base effects starts to recede more rapidly."

On the mainland, the Shanghai Composite was ahead 0.73% at 3,562.66, and the smaller, technology-heavy Shenzhen Composite was 1.46% firmer at 2,492.54.

South Korea's Kospi was off 0.52% at 3,215.91, while the Hang Seng Index in Hong Kong slipped 0.13% to 27,224.58.

Seoul's blue-chip technology stocks were on the back foot in Seoul, with Samsung Electronics down 0.63% and SK Hynix losing 1.27%.

Oil prices climbed at the end of the Asian day, with Brent crude last up 1.2% at $70.18 per barrel, and West Texas Intermediate rising 1.19% to $68.00.

In Australia, the S&P/ASX 200 advanced 0.78% to 7,308.70, as preliminary data showed the country's retail sales shrinking by a seasonally-adjusted 1.8% month-on-month in June.

Major retail plays were mixed in the sunburnt country, with conglomerate Wesfarmers up 2.34% and retail giant Woolworths ahead 1.12%, while department store operator Myer was flat and grocer Coles lost 0.46%.

Across the Tasman Sea, New Zealand's S&P/NZX 50 was 0.46% higher at 12,709.14, led higher by self-listed exchange operator NZX, which rose 5% as it recovered from Tuesday's sell-off.

The down under dollars were in a mixed state against the greenback, with the Aussie last 0.18% weaker at AUD 1.3667, while the Kiwi strengthened 0.15% to NZD 1.4434.

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