By Dow Jones Business News, March 18, 2013, 09:45:00 PM EDT
Asian Shares Rebound, Cyprus Concerns Ease
--Asian stocks recover as Cyprus fears recede.
--Dollar rebounds against the yen.
--RBA minutes weigh on Australian stocks.
Asian markets recovered on Tuesday as fears over a bailout plan for Cyprus receded.
Regional stocks were the first to respond on Monday to news over the weekend that Cyprus planned to impose a
controversial tax on its depositors in order 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 down 1.3% on Monday.
But Asia appeared to have overreacted, as other regions posted more moderate declines. In Europe, the Stoxx 600 Index
closed just 0.2% lower on Monday, rebounding from a 1.2% intraday fall; while in the U.S., the Dow Jones Industrial
Average lost 0.4%.
The U.S. dollar rose against the yen, recovering completely from Monday's losses, and was recently at Y95.66 compared
with Y95.21 late Monday in New York.
The euro was stable in early Asian trading -- at $1.2953, compared with $1.2956 late Monday in New York. The single
currency remained well above its lowest level since Dec. 10 at $1.2880, touched during the previous session.
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 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 1.9%. The market was hit particularly hard on Monday when it fell 2.7% -- its biggest percentage decline in
"Monday's reaction to the Cyprus situation was not unexpected given stocks' stellar performance over the past several
weeks," said Nicholas Smith, Japan 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, the company behind the Uniqlo chain of shops, added 2.2% and Canon rose
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, which were taken as a sign that the central bank is unlikely to cut
The S&P ASX 200 fell into negative territory, down less than 0.1%, though some banks maintained some gains: National
Australia Bank was up 0.5% and Commonwealth Bank of Australia added 0.3%.
In China, the Hang Seng Index in Hong Kong, which was up 0.3%, slightly outpaced the Shanghai Composite Index on the
mainland, which added 0.2%.
A notable mover in Hong Kong was Samsonite International, which jumped 5% after the market welcomed a strong set of
South Korea's Kospi Composite rose 1% and Singapore's Straits Times Index was up 0.8%.
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