Tokyo stocks surge, Europe markets reverse

Tokyo stocks surge, Europe markets reverse

A money dealer takes a moment during an afternoon trading session of Japanese yen and US dollar in Tokyo on Thursday. (EPA photo)
A money dealer takes a moment during an afternoon trading session of Japanese yen and US dollar in Tokyo on Thursday. (EPA photo)

HONG KONG/LONDON — Japan's Nikkei stock index climbed for a 10th straight day Thursday but Europe's stock markets slid in opening trade on Thursday.

Tokyo rose 0.39%, or 78.88 points, to finish at 20,551.46, the longest winning streak since a 13-day run in February 1988. Seoul added 0.16%, or 3.39 points, to 2,110.89.

Malaysia's index ended up 0.3%, or 5.1 points, to close 1755.56 but Jakarta ended down 0.3%, or 15.99 points, at 5,237.40.

Singapore fell 0.21%, or 7.17 points, to 3,417.77, while Manila shed 1.23%, or 93.67 points, to end at 7,505.03.

Shanghai slumped 6.5%, or 321.45 points, to 4,620.27 on speculation authorities will introduce measures to cool the market's recent rally. Hong Kong tracked the losses, sinking 2.23%, or 626.90 points, to 27,454.31.

Sydney ended 0.21%, or 12.2 points, lower at 5,713.1.

In Europe, London's FTSE 100 index was down 0.14% at 7,023.42 points.

Elsewhere, Frankfurt's DAX 30 lost 0.47% to 11,716.08 points and the CAC 40 in Paris shed 0.49% to 5,157.25 compared with the closing levels on Wednesday.

The dollar has resumed its bull run against the yen on growing expectations that the Federal Reserve will hike interest rates by the end of the year while Japan's central bank is tipped to embark on more monetary easing to kickstart a soporific economy.

The chances of a hike have increased following upbeat US data this week and comments from Fed boss Janet Yellen on Friday that rates would go up "at some point this year".

On currency markets the dollar climbed to 124.30 yen at one point in Tokyo -- its highest since late 2002 -- before paring the gains to 123.70 yen later in the day. That compares with 123.63 yen late in New York.

"It's likely that the yen will continue to slowly weaken and we'll have a global risk-on mode, stocks won't rise too quickly but they'll have a steady climb," Mitsushige Akino, executive officer at Ichiyoshi Asset Management Co in Tokyo, said.

"The US economy is OK and as Yellen said recently, the US is trying to raise rates," he said.

The euro edged up to US$1.0935 and 135.24 yen against $1.0906 and 134.83 yen in New York but traders are keeping close tabs on events in Europe as a deadline for Greece to repay some of its debts approaches on June 5.

Greek Prime Minister Alexis Tsipras said on Wednesday his country was "in the final stretch" of talks with its EU-IMF creditors on an agreement to release bailout funds that are needed for it to service its debts.

However, EU sources said a meeting in Brussels between the two sides had been delayed by several hours, while European Commission Vice-President Valdis Dombrovskis earlier said there were important areas still to be resolved.

There are fears that if Athens defaults it could tumble out of the eurozone, which would likely roil global markets.

In Shanghai, investors sold up as talk emerged of regulatory moves to pour water on stocks, while brokerages also tightened rules on lending.

"There's some talk about the securities regulator ordering banks to report on inflows into stocks and financial products," said Clement Cheng, a Hong Kong-based trader at RBC Investment Management. "Tighter margin lending and an upcoming big week for IPOs constrain some liquidity."

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