Nov 3, 2014 10:34 PM

Japan's Nikkei surges, other markets subdued

The Associated Press

TOKYO (AP) Japan's stock benchmark surged 4 percent Tuesday, boosted by central bank stimulus and the government pension fund's plan to buy more equities. Other Asian stock markets posted mild gains or losses.

KEEPING SCORE: The Nikkei 225 in Tokyo gained 4.0 percent to 17,071.18 in its first trading day since Japan on Friday announced new measures to boost faltering economic growth. The market was closed Monday for a holiday; it gained 4.8 percent on Friday. Hong Kong's Hang Seng added 0.2 percent to 23,964.87 while South Korea's Kospi was 0.9 percent lower at 1,934.92. Australia's S&P/ASX 200 added 0.3 percent to 5,524.70. Southeast Asian markets were mixed.

JAPAN'S STIMULUS: Investors continue to rejoice over the double-barreled barrage of stimulus unleashed on Friday. The Bank of Japan's decision to boost asset purchases will raise the amount of money being injected into the economy annually to about 80 trillion yen ($704 billion). Apart from that, the public pension fund is to pare its bond holdings and raise its investments in shares, to help improve the returns it is relying on to meet growing payout obligations.

CHINA'S SHADOW: A lower-than-expected gauge of Chinese manufacturing released by a government-sanctioned industry group has revived fears that growth in the world's second-largest economy will decline further. But shares in Hong Kong and Taiwan regained lost ground Tuesday on expectations that the stronger U.S. dollar will draw more funds into the Hong Kong market.

THE QUOTE: "There may be some nervousness about the slowdown in China but now data suggests growth is stabilizing," said Linus Yip, a strategist at First Shanghai Securities. While a weaker yen and stronger U.S. dollar can be bad news for many regional markets, it tends to attract funds into Hong Kong's share market, he said.

WALL STREET: A report showing that U.S. manufacturing remains on a sound footing helped keep shares close to record levels. The Dow Jones industrial average edged 0.1 percent lower to 17,366.24 and the Standard & Poor's 500 lost a fraction of a percent to 2,017.81.

CURRENCIES: The dollar continued to gain against the yen following the BOJ stimulus announcement and was up to 113.63 yen from 113.59 yen late Monday. That puts the yen at about a seven-year low. The euro rose to $1.2518 from $1.2504.

ENERGY: Benchmark U.S. crude oil was down 40 cents to $78.38 in electronic trading on the New York Mercantile Exchange. It fell $1.76 to close at $78.78 a barrel on Monday. Brent crude, the international benchmark, slipped 47 cents to $84.31.


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