Global stocks rally as Japan drives Asia’s market gains

PUNCH

Global stocks mostly rose on Friday, as European markets returned from the Christmas break tracking Asia gains after a weaker yen lifted Japanese equities.

Seoul was an outlier in Asia with shares plunging as South Korea’s political crisis deepened with a second impeachment vote.

London was flat and Paris gained.

Japan’s Nikkei index closed up nearly two per cent, with the yen’s recent weakness proving a boon for major exporters.

The yen hit 158.08 per US dollar on Thursday evening — its lowest in almost six months — following comments made by Bank of Japan Governor Kazuo Ueda that failed to give a clear signal on a possible interest rate hike next month.

In Europe, Frankfurt’s DAX index rose after German President Frank-Walter Steinmeier dissolved parliament on Friday and confirmed the expected date for the early general election, emphasising the need for “political stability” in Europe’s largest economy.

The BoJ left borrowing costs unchanged last week and warned of uncertainty over the economic policies of US president-elect Donald Trump.

“Today, the yen looks stronger on the back of a freshly released set of stronger-than-expected data,” said Ipek Ozkardeskaya, analyst at Swissquote Bank.

Recent data has showed Japan’s inflation rose for a second month in December, while industrial production declined less than expected in November and retail sales came in higher than estimated last month.

Japan’s government also on Friday approved a record budget for the next fiscal year, ramping up sending on social welfare for its ageing population and defence to tackle regional threats.

In Seoul, the stock market closed down one percent after the won plunged to a near-16-year low of 1,487.03 against the US dollar on Friday morning.

South Korea is struggling to emerge from political turbulence in the wake of President Yoon Suk Yeol’s martial law declaration this month, which prompted his impeachment.

Acting President Han Duck-soo was also impeached Friday in a vote that prompted ruling party lawmakers to protest with angry chants and raised fists.

South Korea’s business outlook for January fell in the Bank of Korea’s composite sentiment index, the biggest month-on-month slide since April 2020, according to data based on almost 3,300 firms released Friday.

Elsewhere Asia, Shanghai and Hong Kong edged up.
– Key figures around 1100 GMT –

London – FTSE 100: FLAT at 8,138.29

Paris – CAC 40: UP 0.6 percent at 7,328.79

Frankfurt – DAX: UP 0.4 per cent at 19,932.52

Tokyo – Nikkei 225: UP 1.8 per cent at 40,281.16 points (close)

Seoul – Kospi: DOWN 1.0 per cent at 2,404.77 (close)

Hong Kong – Hang Seng Index: UP 0.1 per cent at 20,116.93 (close)

Shanghai – Composite: UP 0.1 per cent at 3,400.14 (close)

New York – Dow: UP 0.1 per cent at 43,325.80 (close)

Euro/dollar: UP at $1.0427 from $1.0424 on Thursday…