By RTT News, October 09, 2013, 05:18:00 AM EDT
(RTTNews.com) - Asian stocks recouped early losses to end mostly higher on Wednesday, with Japanese shares leading the way after the White House said President Barack Obama will nominate dovish Federal Reserve Vice Chairwoman Janet Yellen to replace Ben Bernanke as head of the U.S. central bank. Investors expect Yellen's policies to be more in line with those of outgoing chairman, decreasing the chances of capital flight from emerging to high-income countries. The relief that the Fed will not tighten its policy anytime soon helped investors to put pressing U.S. fiscal issues on the back burner, at least temporarily.
The standoff over reopening government and raising the nation's debt ceiling continues, as President Barack Obama reiterated that he will not negotiate on budget issues until short-term spending and debt limit bills are passed.
Tokyo stocks rallied, benefiting from a weaker yen amid optimism U.S. lawmakers will resolve the impasse on the debt ceiling before the October 17 deadline. The Nikkei average climbed a percent to 14,038, while the broader Topix index jumped 1.5 percent. The yen weakened on improved risk appetite after the White House said Yellen will succeed Bernanke as Fed chairman, with a formal announcement expected later in the day.
Exporters paced the gainers, with Honda Motor, Fanuc, Toyota Motor and TDK rising 2-4 percent. Panasonic rose 1.6 percent on reports the consumer electronics giant has decided to stop production of plasma television panels by the end of the current fiscal year and fully exit the business. Softbank Corp. plunged 5.7 percent on a rating downgrade by Citigroup Inc.
Yahoo Japan Corp tumbled 3.7 percent, extending Tuesday's loss, after the company said it would eliminate vendor fees for its shopping and auction sites. Mizuho Financial Group Inc. declined a percent as the nation's third-largest bank admitted a former top executive was aware of loans to crime groups three years ago.
The minutes of the Bank of Japan's September policy meeting showed that some board members noted the Japanese economy is seeing a moderate recovery but not yet out of the woods amidst external vulnerabilities. The nine-member board revised up its overall economic assessment, saying a virtuous cycle spanning from production to income and spending was functioning well.
Separately, Bank of Japan Deputy Governor Hiroshi Nakaso told business leaders in Matsue, western Japan today that Japanese exports are improving but there could be "significant adverse effects" on the global economy if the U.S. government fails to raise its debt ceiling by the middle of this month. "A prompt resolution of the fiscal consultation issue is critical for the global economy, including Japan," he observed.
China's Shanghai Composite index closed 0.6 percent higher, led by gains in Tianjin-related property stocks amid expectations that Tianjin will follow Shanghai with a free trade zone of its own. Hong Kong's Hang Seng index, however, fell 0.6 percent on renewed U.S. debt ceiling concerns.
Australian shares erased early losses to finish marginally higher, with mining stocks leading the recovery despite concerns over a potential U.S. default. The benchmark S&P/ASX 200 edged up 0.1 percent, snapping a three-day decline. BHP Billiton rose 0.4 percent and Newcrest Mining gained 0.9 percent after announcing the departure of its chief executive officer and chairman. Westpac led banks higher with a 0.6 percent gain and NAB added 0.2 percent, while ANZ and Commonwealth closed largely unchanged.
Transurban Group shares rallied 1.8 percent on analyst upgrades. WorleyParsons lost 2.9 percent after issuing a profit warning. On the economic front, an index measuring consumer confidence in Australia eased in October after surging to a 33-month high last month in the wake of the federal election, a private survey showed. The Westpac-Melbourne Institute consumer sentiment index fell 2.1 percent to 108.3 points.
New Zealand shares lost ground as investors digested mixed economic data. The benchmark NZX-50 dropped 0.6 percent to 4,711. The total number of credit card transactions in New Zealand fell a seasonally adjusted 0.4 percent in September compared to the previous month, Statistics New Zealand said - falling below forecasts for an increase of 0.4 percent. Children's clothing chain Pumpkin Patch led the retailers lower with a 3.7 percent loss, while Kathmandu Holdings, Hallenstein Glasson Holdings and Michael Hill International lost about a percent each.
Another report released by property research firm Quotable Value showed that residential property prices in New Zealand increased 8.4 percent on an annual basis in September, driven primarily by Auckland and Canterbury, ahead of the introduction of home lending restrictions by the government.
Elsewhere, India's Sensex was adding a percent, Indonesia's Jakarta Composite was gaining 0.7 percent and Singapore's Straits Times was up 0.2 percent, while the key benchmark indexes in Malaysia and Taiwan were subdued. South Korea's market was closed for a public holiday.
U.S. stocks extended losses overnight with a lack of progress in ending the fiscal impasse weighing on the markets. The Dow lost 1.1 percent, the tech-heavy Nasdaq tumbled 2 percent and the S&P 500 dropped 1.2 percent.
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