Asian stocks tread water, Nikkei rebounds as yen hits 1990 lows

Investing.com-- Most Asian stocks moved in a flat-to-low range on Wednesday, as middling cues from Wall Street and anticipation of more signals on the Federal Reserve kept traders to the sidelines.

Japanese markets were an exception, as weakness in the yen spurred strong gains in export-oriented stocks. Japan’s benchmark indexes shrugged off recent weakness and were back in sight of record highs.

Broader Asian markets largely tracked overnight weakness in Wall Street, as profit-taking in tech and anticipation of key inflation data and Fed speakers weighed on sentiment. But U.S. stock index futures rose slightly in Asian trade. 

Nikkei 225 rebounds as yen weakens 

The Nikkei 225 and the broader TOPIX index both advanced 0.9% on Wednesday, boosted by a mix of export stocks, and as retail investors also bought into shares set to trade ex-dividend.

Gains in Japanese equities came as the yen tested its weakest levels in nearly 34 years. The USDJPY pair rose 0.2% to 151.97- its highest level since mid-1990. 

A dovish outlook for the Bank of Japan was also a key driver of this trade, after reports that BOJ board member Naoki Tamura said the central bank must proceed slowly and steadily towards normalizing its ultra-loose policy. 

Wednesday’s gains put the Nikkei squarely in sight of record highs above 41,000 points hit earlier in March, while the TOPIX also traded just a hair away from lifetime peaks. 

Wall St weakness keeps broader Asia muted 

Broader Asian stocks moved in a flat-to-low range, tracking overnight weakness on Wall Street as markets hunkered down before key PCE price index data and Fed speakers later in the week.

Chinese stocks saw persistent selling as weak risk appetite made traders particularly averse to the country. The Shanghai Shenzhen CSI 300 and Shanghai Composite indexes fell 0.5% and 0.6%, respectively, while losses in mainland stocks dragged Hong Kong’s Hang Seng index down 0.8%. 

Markets took little support from data showing Chinese industrial profits rose sharply in the first two months of 2024. But the rise was also in part driven by a weaker base for comparison from the prior year.

Australia’s ASX 200 rose 0.3%, aided chiefly by data showing consumer price index inflation remained muted in February. The reading gave more credence to a less hawkish outlook for the Reserve Bank of Australia.

South Korea’s KOSPI was flat as a rally in local chipmaking stocks cooled. But memory chip maker SK Hynix Inc (KS:000660) shot up 3.3% after its CEO said the firm expected much more demand from the artificial intelligence industry this year. 

Futures for India’s Nifty 50 index pointed to a mildly negative open, with the index set to largely track declines in its Asian peers.