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Tokyo gains on weaker yen, but Shanghai off on HSBC flash PMI survey

Published 04/22/2015, 11:38 PM
Updated 04/22/2015, 11:40 PM
© Reuters.  Asian shares mixed

© Reuters. Asian shares mixed

Investing.com - Tokyo gained as the yen eased against the dollar on Thursday, but shares in Shanghai eased down slightly after a manufacturing survey by HSBC (LONDON:HSBA) pointed to continued weakness.

The Nikkei 225 rose 0.38.while the Shanghai Composite dipped 0.11%. The S&P/ASX 200 was down 0.10% on a disappointing business confidence and conditions survey and the HSBC views on China.

In China, the HSBC (LONDON:HSBA) flash manufacturing PMI fell to 49.2 in April from March's final of 49.6, shrinking for the third month in-a-row.

"The HSBC Flash China Manufacturing PMI signaled a slight deterioration in the health of China's manufacturing sector in March," said Annabel Fiddes, economist at Markit.

A renewed fall in total new business contributed to a weaker expansion of output while companies continued to trim their workforce numbers. Meanwhile, manufacturing companies continued to benefit from falling input costs stemming from the recent global oil-price decline. However, relatively muted client demand has led firms to pass on savings in a bid to boost new work and cut their selling prices at a similarly sharp rate."

Meanwhile, in Australia is the first quarter NAB business confidence and business conditions survey showed confidence flat from plus-2 in the fourth quarter and conditions down to plus-2 from plus-5.

Overnight, U.S. stocks were higher after the close on Wednesday, as gains in the Technology, Financials and Telecoms sectors led shares higher.

At the close in New York, the Dow Jones Industrial Average rose 0.49%, while the S&P 500 index added 0.51%, and the NASDAQ Composite index gained 0.42%.

The Federal Housing Finance Agency (FHFA) also said Wednesday that its House Price Index (HPI) ticked up 0.7% in February, above a 0.4% increase a month earlier. The index, which covers single-family housing by evaluating data compiled by Fannie Mae and Freddie Mac, increased 5.4% on a year-over-year basis. In its previous monthly report, the FHFA said the index rose 5.1% from its level during the same period last year.

The Fed is taking a data-driven approach, as it contemplates on the timing of its first interest-rate hike since 2009. In recent weeks, worse than expected import/export, industrial production and employment data have lowered expectations of an imminent rate hike when the Federal Open Market Committee meets in June.

When the Fed released the minutes from its Federal Open Market Committee meeting in March on April 8, it reiterated that it will phase in monetary policy changes gradually when it is confident that the economy is strong enough to handle a rate increase.

"When the Committee decides to begin to remove policy accommodation, it will take a balanced approach consistent with its longer-run goals of maximum employment and inflation of 2%," the Fed said in the minutes. "The Committee currently anticipates that, even after employment and inflation are near mandate-consistent levels, economic conditions may, for some time, warrant keeping the target federal funds rate below levels the Committee views as normal in the longer run."

Gold struggles to compete with high yield-bearing assets in periods of rising interest rates. On March 6, gold plunged by more than $30 an ounce when a strong U.S. jobs report for the month of February provided an indication that the Federal Reserve could alter its interest rate environment.


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