Asian markets mostly down, yen surges on BoJ comments

HONG KONG - Most Asian markets fell Wednesday, with Tokyo suffering a late sell-off as the yen rose sharply after comments from the central bank chief that the currency would probably not weaken further.

The remarks from Haruhiko Kuroda reversed morning gains in the dollar against the Japanese currency, fuelled by two US reports that gave the Federal Reserve more ammunition to raise interest rates.

With US markets ending largely unchanged, the region had few catalysts to fuel trade, while Greece's ongoing bailout reform talks continue to keep dealers jittery.

Tokyo ended 0.25 per cent lower, dropping 49.94 points to 20,046.36, while Seoul shed 0.62 per cent, or 12.71 points, to 2,051.32. However, Sydney added 0.13 per cent, or 7.29 points, to 5,478.6.

Hong Kong lost 1.12 per cent, or 301.88 points, to close at 26,687.64.

Shanghai closed down 0.15 per cent, giving up 7.50 points to 5,106.04 after MSCI delayed including Chinese A shares in its benchmark index, saying it needed to resolve new issues with Chinese regulators.

The market's rise in the past few days had been prompted partly by expectations it would be added, which would have attracted more funds.

Expectations that the US central bank would start raising interest rates before year-end were amplified on Tuesday after the JOLTS (Job Openings and Labor Turnover Survey) report showed a surge in job vacancies.

Separately, a US small business survey showed businesses were hiring more people and paying them more.

However, Kuroda told a parliamentary committee Wednesday that "a US rate hike would not necessarily lead to a cheaper yen" and said a further decline in the unit was "unlikely".

While the yen's sharp decline has been good news for Japanese exporters, it has pushed up the cost of imports and eroded consumers' purchasing power.

Greece in focus

"Japanese officials clearly don't like to see their currency moving in one direction too fast," Sue Trinh, senior currency strategist at Royal Bank of Canada in Hong Kong, told Bloomberg News.

In Tokyo Wednesday the dollar fell to 122.71 yen from 124.53 yen in morning trade. Earlier this week it was above 125 yen, at a 13-year high.

The euro also suffered, buying 139.69 yen from 140.51 in the morning.

In US share trading Tuesday the Dow and S&P 500 ended flat and the Nasdaq fell 0.15 per cent.

Currency traders pushed the euro up against the dollar as officials pore over Greece's proposals for overhauling its bailout.

The single currency was at $1.1384 against $1.1297 in New York.

With Greece facing a deadline at the end of the month for a debt repayment, it desperately needs to reach an agreement that will unlock billions of euros to help avoid a default and possible exit from the eurozone.

As Prime Minister Alexis Tsipras prepares to meet German Chancellor Angela Merkel Wednesday for talks, Valdis Dombrovskis, the EU's vice president for the euro, told reporters that reaching an agreement "within (the) coming days is possible".

Oil prices were higher on expectations of a further decline in US crude stockpiles. US benchmark West Texas Intermediate for July delivery gained 76 cents to $60.90, while Brent was up 57 cents at $65.45.

Gold fetched $1,188.80 compared with $1,181.70 late Tuesday.

In other markets: - Taipei rose 1.16 per cent, or 106.63 points, to 9,298.5.

Hon Hai Precision Industry added 2.58 per cent to Tw$95.6 while Cathay Financial Holding closed 1.74 per cent higher at Tw$52.7.

- Wellington fell 0.99 per cent, or 58.24 points, to 5,803.87.

Contact Energy was down 3.12 per cent at NZ$5.28 and Spark slipped 1.04 per cent to NZ$2.85.

- Manila closed up 0.83 per cent, or 60.83 points, at 7,384.27.

Metrobank was 2.33 per cent higher at 88 pesos, Universal Robina rose 1.36 per cent to 186.50 pesos and GT Capital edged up 0.08 per cent to 1,301 pesos.

- Singapore closed up 0.93 per cent, or 30.64 points, to 3,325.77.

Oil-rig maker Keppel Corp rose 0.24 per cent to Sg$8.41 while public transport operator ComfortDelGro gained 1.97 per cent to Sg$3.10.

- Bangkok added 0.79 per cent, or 11.72 points, to 1,504.04.

Bumrungrad Hospital rose 2.22 per cent to 184.00 baht, while oil company PTT Exploration and Production gained 4.23 per cent to 111.00 baht.

- Kuala Lumpur rose 0.38 per cent, or 6.58 points, to 1,735.63.

Telekom Malaysia rose 2.73 per cent to 6.78 ringgit, while Public Bank lost 0.11 per cent to 18.72 ringgit.

- Jakarta ended up 0.69 per cent, or 33.68 points, at 4,933.56.

Palm oil firm Astra Agro Lestari gained 3.13 per cent to 23,925 rupiah, while auto components manufacturer Astra Otoparts slipped 3.92 per cent to 2,450 rupiah.

- Mumbai gained 1.36 per cent, or 359.25 points, to 26,840.50.

Bharat Heavy Electricals rose 4.21 per cent to 251.40 rupees, while drug maker Cipla fell 0.01 per cent to 593.45 rupees.