Asian shares slipped on Wednesday after a mixed day on Wall Street, though Japan’s better-than-expected economic growth lifted the Nikkei to a 15-year high.
The dollar scaled a two-month high against the yen after upbeat U.S. housing data, and as the euro remained pressured by expectations that the European Central Bank would increase its bond-buying stimulus as well as on fresh concerns about Greece.
Athens will not make a payment to the International Monetary Fund that falls due on June 5 if there is no deal with its creditors by then, the government’s parliamentary speaker said on Wednesday.
European shares were seen giving back some of the previous session’s gains, with financial spreadbetters expecting Britain’s FTSE 100 .FTSE to open around 0.1 percent lower, and Germany’s DAX .GDAXI and France’s CAC 40 .FCHI were each seen down about 0.4 percent.
MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was down about 0.2 percent.
But the Nikkei stock index .N225 ended up 0.9 percent at a fresh 15-year peak, catching a tailwind from a weaker yen and after data showed Japan’s economy grew at a 2.4 percent annualized rate in the January-March period. That was its fastest pace in a year, beating the consensus estimate for 1.5 percent growth.
While investors took heart from the overall GDP data, some warned that the details failed to tell a story of a sustainable economic recovery.
“Headlines are nice, but if you look at the content carefully, there are weak spots,” said Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities, citing higher inventory as an increase in business investment fell short of expectations.
Wall Street put in a mixed performance on Tuesday. The Dow Jones industrial average .DJI eked out a slight gain to close at a fresh record high, while the Nasdaq Composite .IXIC and the S&P 500 .SPX both edged down, though the latter touched a record intraday high.
Data showed that U.S. housing starts in April jumped to their highest level in nearly 7-1/2 years and building permits soared, raising hopes that the economy was regaining strength after stalling in the first quarter but also rekindling fears that the U.S. Federal Reserve would raise interest rates sooner rather than later.
The euro nursed losses after plunging more than 1 percent against the dollar in the previous session, mainly on comments from European Central Bank Executive Board member Benoit Coeure that the ECB could “moderately” increase its bond-buying program in May and June, and possibly in September.
The common currency was buying $1.1130 EUR=, down 0.3 percent on the day.
“There are some positioning stories in the EUR but I don’t think it is an overall driving force right now. I believe investors are just pulling back to let the dust settle before they take the next step,” said Bart Wakabayashi, head of forex at State Street in Tokyo.
The dollar added 0.2 percent against the yen to 120.93 JPY=, underpinned by the brighter U.S. data on Tuesday that drove away some of the clouds of a recent spate of weak economic figures. It earlier rose above the 121 yen level for the first time since March 20.
But the better-than-expected Japanese GDP figures gave some support to the yen, as they made it less likely that the Bank of Japan would take additional easing steps anytime soon. The BOJ is likely to stand pat at a policy meeting ending on Friday.
Crude oil futures were off session highs but still took back some lost ground after sinking more than 3 percent overnight as the dollar strengthened.
Brent LCOc1 added about 0.4 percent to $64.28 a barrel while U.S. crude CLc1 also rose about 0.4 percent to
$58.24, after both shed more than $2 a barrel on Tuesday.
Source: Reuters
