Asia stocks mixed; Nikkei ends up 0.6% as yen weakens

Asian stock markets were mixed on Tuesday, with shares in Japan climbing to a seven-week high as traders continued to eye movements in the yen and in the Japanese government bond market.

During late Asian trade, Hong Kong's Hang Seng Index was up 0.2%, Australia’s ASX/200 Index ended 0.1% higher, while Japan’s Nikkei 225 Index added 0.6%.

In Tokyo, the Nikkei rose to the highest level since May 24 as traders returned from a three-day weekend.

USD/JPY rose to hit a session high of 100.21, moving off Friday’s low of 98.66. A weaker yen increases the value of overseas income at Japanese companies when repatriated, boosting the outlook for export earnings.

Automakers Mazda and Nissan rose 1.4% and 1.8% respectively, while Canon and Nikon added 2.7% and 1.4% apiece.

Japanese megabanks were also higher, with shares in the nation’s largest lender Mitsubishi UFJ Financial Group climbing 1.1%, while Sumitomo Mitsui Financial Group and Mizuho Financial Group advanced 0.5% and 0.9% respectively.

Meanwhile, in Australia, the benchmark ASX/200 Index inched higher following the release of the minutes of the Reserve Bank of Australia’s most recent policy-setting meeting.

The RBA said low inflation leaves room for a further cut in interest rates if the economy requires more support.

The big four banks all rose, with National Australia Bank gaining 0.3%, while ANZ Banking Group and Westpac Banking Group advanced 0.7% and 1.1%. Commonwealth Bank of Australia tacked on 0.7%. 

Miners advanced on the back of rising metal prices. Rio Tinto and BHP Billiton jumped 1.4% and 0.5% respectively.

Rio Tinto was further supported after reporting that second-quarter global iron ore production rose 7%. BHP will release its output results on Wednesday.

Elsewhere, in Hong Kong, the Hang Seng swung between small gains and losses amid lingering concerns over a slowdown in China’s economic growth.

Data released on Monday showed that the world’s second largest economy expanded 7.5% in the second quarter from a year earlier, in line with market expectations and slowing from a 7.7% increase in the preceding quarter.

Index heavyweight Tencent Holdings rallied 2.9% to hit a fresh record high.

Looking ahead, European stock market futures pointed to a flat open, as market participants looked ahead to a congressional testimony from Federal Reserve Chairman Ben Bernanke on Wednesday for further clues on the future of U.S. economic stimulus.

The EURO STOXX 50 futures pointed to a gain of 0.1% at the open, France’s CAC 40 futures added 0.1%, London’s FTSE 100 futures were little changed, while Germany's DAX futures pointed to a flat open.  

The ZEW Institute was to release its closely watched report on German economic sentiment later Tuesday and the euro zone was to release official data on consumer price inflation.

The U.S. was also to release official data on consumer price inflation and a report on industrial production.

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Forex - EUR/USD pushes higher ahead of Bernanke

The euro pushed higher against the dollar on Tuesday as investors positioned ahead of testimony to Congress by Federal Reserve Chairman Ben Bernanke on Wednesday.

EUR/USD hit 1.3096 during late Asian trade, the session high; the pair subsequently consolidated at 1.3082, rising 0.16%.

The pair was likely to find support at 1.2998, Friday’s low and resistance at 1.3150, the high of June 25.

Market participants were looking to Bernanke's testimony on monetary policy amid speculation over the timing of a possible reduction to the bank’s USD85 billion-a-month bond buying program.

The dollar fell sharply last week after Bernanke said the U.S. economy still needed monetary stimulus.

Data on Monday showing that U.S. retail sales rose less-than-expected June fuelled fears over a slowdown in the economic recovery.

The Commerce Department said U.S. retail sales rose 0.4% in June, slowing from a 0.5% increase in May and undershooting expectations for a 0.8% increase. 

However, a separate report showed that the Empire State manufacturing index rose to a five-month high of 9.5 in July from 7.8 in June. Economists had forecast a reading of 5.0.  

The euro was steady against the pound, with EUR/GBP edging up 0.01% to 0.8648 and was slightly higher against the yen, with EUR/JPYeasing up 0.13% to 130.59.

The ZEW Institute was to release its closely watched report on German economic sentiment later Tuesday and the euro zone was to release official data on consumer price inflation.

The U.S. was also to release official data on consumer price inflation and a report on industrial production.

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Asian stocks mostly lower despite decent earnings; Nikkei up 0.40%

Most Asian stocks traded lower Tuesday despite some impressive second-quarter earnings reports unveiled during Monday’s U.S. session. 

In Asian trading Tuesday, Japan’s Nikkei 225 rose 0.40% as Japanese markets reopened a day after being closed for a national holiday.USD/JPY traded slightly lower as traders awaited the release of minutes from last week’s Bank of Japan meeting. 

Hong Kong’s Hang Seng fell 0.31% while the Shanghai Composite Dropped 0.69% a day after China reported second-quarter GDP growth of 7.5%, a reading that met analysts’ expectations. 

Chinese property developers and real estate firms slid on fresh concerns policymakers there will take steps to curb speculative real estate investments. High property values are seen as a drag on the world’s second-largest economy and politicians there would like to temper those rising prices. Data released Monday show home sales transactions in China jumped 24% last month. 

The Shanghai Composite is down nearly 10% year-to-date, but is one of the cheapest major emerging markets indices in the world. 

Australia’s S&P/ASX 200 Index rose 0.1%. Traders there are also waiting on the release of central bank meeting minutes. Last week, the Reserve Bank of Australia left rates unchanged at a record low of 2.75%, but expectations are in place for further rate cuts later this year. 

New Zealand’s NZSE 50 fell 0.35% after Statistics New Zealand said consumer price inflation there rose by 0.2% last quarter compared with a 0.4% in the first quarter. Analysts expected an increase of 0.3%.NZD/USD traded higher after that report. 

South Korea’s Kopsi fell 0.67% as the won climbed to a five-week high. Traders see near-term won upside as limited until Federal Reserve Chairman Ben Bernanke delivers congressional testimony later this week. 

Singapore’s Straits Times Index dropped 0.39% while S&P 500 futures inched down 0.05% a day after the benchmark U.S. index added 0.14%. 

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