Asian markets rise in early trading, G20 to meet tomorrow
Asian markets got off to a good start on Thursday as traders returned after the Chinese New Year holiday. Hong Kong saw a rise of 0.75% in early trading while Japan’s Nikkei index was bolstered by a weakening yen. This was despite figures showing the Japanese economy shrank by 0.1% in the final quarter of 2012. The biggest gain of the morning on the Nikkei 225 was brewer, Asahi Group Holdings that rose 7.4% after announcing record profits and a share buyback.
Sydney saw a modest gain, with the ASX/S&P rising 0.24% to reach a four-and-a-half year high. Leading the way was the refining company, Alumina that surged by 12% due to Citic Resources Holding agreeing on a share purchase worth $452m AUD. Rio Tinto was also up, by 1.9% prior to an earnings update that is due to be released later today.
On Friday, the G20 is due to meet in Moscow to address concerns over what many analysts refer to as a currency war. With economies being so fragile, it is thoughts that governments are intentionally weakening their currencies to help boost exports. Japan is at the forefront of this with the yen having weakened by 7% against the dollar so far this year. Mass quantitative easing is considered to be the reason for this depreciation.
Sean Callow, senior currency strategist at Westpac Institutional Bank in Sydney told Dow Jones Newswires: “The risk for currencies is whether there are strong comments from some of the many officials, with their different viewpoints”.
The meeting of representatives from the 20 major economies in the world is considered to be one of the most important in recent years. All eyes will undoubtedly be on Russia tomorrow.