By Dow Jones Business News, March 19, 2013, 07:29:00 AM EDT
By Daniel Inman
HONG KONG (MarketWatch) -- Most Asian markets on Tuesday gained as fears about the euro zone subsided, with Japan
recovering strongly due to a weaker yen and Australia falling following the latest Reserve Bank of Australia minutes.
Regional stocks were the first to respond on Monday to news over the weekend that Cyprus planned to impose a tax on
its depositors to lessen the cost of rescuing its financial system.
Worries that the euro-zone crisis was flaring up again pushed the broad MSCI Asia ex-Japan index (AAXJ) down 1.3% on
But Asia appeared to have overreacted, as other regions posted more moderate declines. In Europe, the Stoxx 600 Index
closed 0.2% lower on Monday, rebounding from a 1.2% intraday fall; while in the U.S., the Dow Jones Industrial Average
(DJI) lost 0.4%.
The U.S. dollar rose against the yen, (USDJPY) recovering completely from Monday's losses, and was at 95.38 late in
Asia compared with 95.21 late Monday in New York.
The euro (EURUSD) was stable for most of the Asian session, though it dipped as the day progressed to $1.2922,
compared with $1.2956 late Monday in New York. The single currency remained well above its lowest level since Dec. 10 at
$1.288, touched during the previous session.
Bank of Japan meeting
The next event on the horizon for the yen is the Bank of Japan's April policy meeting, where expectations are high
that the central bank's new leadership team will implement a more aggressive monetary policy.
The U.S. dollar's recovery against the yen translated into a rebound for Japanese stocks, with the Nikkei Stock
Average up 2% at 12,468.23. The market was hit particularly hard on Monday when it fell 2.7%, its biggest percentage
decline in 10 months.
"Monday's reaction to the Cyprus situation wasn't unexpected given stocks' stellar performance over the past several
weeks," said Nicholas Smith, equity strategist at CLSA in Tokyo.
Large constituents in the Nikkei that dipped in the previous session recovered on Tuesday. Exporters also recovered,
supported by the weaker yen. Fast Retailing, (FRCOY) the company behind the Uniqlo chain of shops, added 2.8% and Canon
( CAJ ) rose 3.1%.
Other markets that recovered on Tuesday include South Korea, where the Kospi ended up 0.5% at 1,978.56; the Shanghai
Composite in mainland China, which closed 0.8% higher at 2,257.43; and Singapore's Strait Times Index, which finished
up 0.4% at 3,269,13.
Australian stocks started the day higher, but their recovery ground to a halt after minutes from the Reserve Bank of
Australia'sMarch 5 policy meeting were published. Although the central bank said that a further cut in rates could be
required, the minutes were taken as a sign that the central bank is unlikely to cut interest rates.
The S&P ASX 200 reversed a gain and ended in negative territory, down 0.6% at 4987.40.
The other major market that failed to gain was Hong Kong, where the Hang Seng Index lost 0.2% to 22,041.86. But a
notable mover in Hong Kong was Samsonite International, (SMSEY) which jumped 4.6% after the market welcomed the
luggage company's latest set of earnings.
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