Asian stocks mixed after China-fuelled rally

HONG KONG - Asian markets were mixed Tuesday after a Chinese rate cut had fuelled a rally in the previous session, while Tokyo played catch-up following a long holiday weekend.

The yen made inroads against the dollar and euro after the Bank of Japan chief indicated he was concerned about the impact of a weak currency on the economy, while minutes showed policymakers split on last month's stimulus boost.

Tokyo rose 0.29 per cent, adding 50.11 points to finish at 17,407.62, while Seoul was slightly higher, gaining 1.67 points to 1,980.21.

Sydney shed 0.50 per cent, or 27.0 points, to end at 5,334.8, while Hong Kong slipped 0.21 per cent, or 49.23 points, to 23,843.91.

Shanghai rallied 1.37 per cent, or 34.72 points, to close at 2,567.60 - adding to a 1.85 per cent rise Monday and the highest since Aug 2011.

Traders largely took their foot off the pedal after Monday's surge that came on the back of China's surprise decision last week to slash interest rates for the first time in two years, in a bid to kickstart growth.

Wall Street provided a positive lead Monday ahead of the release of US third-quarter growth figures later in the day as well as data on consumer confidence, home prices and business activity.

The Dow edged up 0.04 per cent to its third straight record close and the S&P 500 gained 0.29 per cent, also an all-time high. The Nasdaq tacked on 0.89 per cent.

In foreign exchange markets the yen enjoyed a pick-up after BoJ governor Haruhiko Kuroda said policymakers were aware of the impact of its sharp decline on the world's number-three economy.

Worry over yen weakness

The currency has tumbled to multi-year lows against the dollar and euro since the central bank expanded its stimulus programme on Oct 31.

"We will monitor (market movements) carefully, including their impact on the actual economy," Kuroda was quoted by the Nikkei business daily as telling business leaders in a speech on Tuesday.

Also Tuesday minutes showed the bank's policy board split 5-4 in favour of the ramped-up asset-purchasing, with some warning a weak yen would batter small domestic firms owing to soaring import costs.

Others questioned its likely ultimate impact on boosting growth.

In afternoon trade the dollar was at 117.90 yen, down from 118.25 yen in US trade, while the euro bought 146.48 yen compared with 147.10 yen in New York.

The single currency was also at US$1.2421 against US$1.2439.

However, the single currency is up from levels seen earlier Monday in Asia after the Ifo index of German business confidence rose this month, providing some welcome news from the eurozone's biggest economy which has shown signs of struggling recently.

"The downturn in the German economy has ground to a halt for the moment at least," said Ifo chief Hans-Werner Sinn.

Oil prices were mixed before a closely watched meeting of the OPEC cartel, which will decide whether to cut output to prevent prices falling further.

US benchmark West Texas Intermediate for January delivery fell five cents to US$75.73 while Brent crude for January fell 38 cents to US$79.30 in afternoon trade.

Gold was at US$1,197.57 an ounce, compared with US$1,195.75 late Monday.