Asian stocks ended mixed on Tuesday, with Japanese markets closing on a subdued note while Australian shares skyrocketed following the release of the banking royal commission’s “scathing” final report. Several markets in the region were closed for the Lunar New Year holidays.
Japanese shares fell after a BoJ official said the yen could jump to 95 per U.S. dollar in the first half of the year and the central bank is running short on ammo.
The downside, however, remained limited after a survey showed the services sector in Japan expanded at a stronger pace in December.
The Nikkei average dropped 39.32 points or 0.19 percent to 20,844.45 while the broader Topix index closed marginally higher at 1,582.88.
Panasonic fell 2.5 percent after a profit warning, while Yahoo Japan jumped 9.2 percent in reaction to a positive earnings report.
Australian markets soared amid strong gains in the banking sector as the Reserve Bank of Australia left official interest rates on hold at 1.5 percent and the financial services royal commission refrained from recommending harsher measures.
The benchmark S&P/ASX 200 jumped 114.70 points or 1.95 percent to 6005.90, marking the biggest single-day gain since November 2016 and the highest closing level since October last year. The broader All Ordinaries index rallied 1.76 percent to end at 6,068.10.
The big four banks soared 4-7 percent while wealth manager AMP jumped 10 percent and insurer Steadfast Group advanced 11.5 percent.
IOOF Holdings gained 8 percent despite the wealth manager being open to possible civil or criminal proceedings after the release of the report.
Mortgage brokers fell after the Kenneth Hayne report recommended reforms to trading commissions. Australian Finance Group plunged more than 29 percent and Mortgage Choice lost over 25 percent.
Miners BHP, Rio Tinto, South32 and Fortescue Metals Group climbed 1-5 percent while energy stocks Woodside Petroleum, Origin Energy and Oil Search rose 1-2 percent.
In economic news, the RBA today kept its benchmark interest rate on hold, but flagged a downgrade to growth forecast for this year amid increasing downside risks to the global growth outlook, impact of falling house prices in Australia as well as uncertainty over household spending.
Australian trade balance figures for December topped forecasts while retail sales numbers came in below expectations. The services sector in Australia fell sharply into contraction in January with a seasonally adjusted PMI score of 44.3.
New Zealand shares rose sharply, with dual-listed banks leading the surge, after Kenneth Hayne’s royal commission final report turned out to be less harsh than many had expected. The benchmark S&P/NZX 50 index climbed 94.31 points or 1.05 percent to 9,073.72.
Most of the regional markets were closed for the Lunar New Year, including South Korea, Malaysia, Singapore, Taiwan, China, Hong Kong and Indonesia. India’s Sensex was rising 0.4 percent as investors looked ahead to a three-day policy meeting of the Reserve Bank of India, beginning later in the day.
Overnight, U.S. stocks ended higher for the fourth straight session after President Donald Trump told CBS that trade talks with Beijing are “doing very well” and added that he saw a “good chance” of reaching a deal with North Korea on denuclearization.
The Dow Jones Industrial Average climbed 1.7 percent, the tech-heavy Nasdaq Composite rallied 1.2 percent and the S&P 500 rose 0.7 percent to reach their best closing levels in two months.