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Currencies fluctuate in Asia ahead of May’s speech

Tuesday 02.00 GMT

Overview

Stocks were putting in a mixed performance in Asia, while currencies fluctuated as markets braced for the impact of a speech by UK Prime Minister Theresa May laying out her administration’s Brexit blueprint.

Hot topic

The Japanese yen rallied as some traders initially sought havens, strengthening as much as 0.3 per cent before swinging back to be 0.1 per cent weaker at ¥114.26 per US dollar.

Japanese equities were in thrall to movements in foreign exchange markets. Tokyo’s broad Topix dropped as much as 1.3 per cent before the broad-based sell-off eased as early yen strength dissipated, helping the index pare losses to 0.6 per cent.

The Nikkei 225 was down 0.4 per cent after an earlier decline of 1.3 per cent.

Forex

The UK pound vacillated between marginal gains and losses against the dollar. By mid-morning in Asia it was virtually flat at $1.2048, having dropped 1.1 per cent on Monday amid uncertainty about the content of Mrs May’s speech on Tuesday.

The dollar index, measuring the US currency against a basket of it peers, was up 0.4 per cent at 101.610.

Equities

With US markets shut on Monday for Martin Luther King Jr Day, Asian stocks took their starting cues from Europe where the FTSE 100 shed 0.2 per cent and the Stoxx 600 dropped 0.8 per cent.

Sentiment across the region was gloomy. In Australia the S&P/ASX 200 dropped 0.7 per cent as the Aussie dollar weakened 0.1 per cent to A$0.7470, despite better than expected housing loan growth figures for November.

Hong Kong’s Hang Seng index was up 0.1 per cent after a drop of 1 per cent the previous session. On the mainland, China’s Shanghai Composite was off 0.6 per cent, while the Shenzhen Composite dropped 0.3 per cent a day after sliding 3.6 per cent as the securities regulator’s approval of 10 initial public offerings damped demand and drew attention away from existing stocks.

In South Korea the Kospi index added 0.6 per cent as the won weakened 0.4 per cent to Won1,186.30 against the dollar. The currency declined 0.6 per cent on Monday as authorities sought a warrant for the arrest of the heir-apparent to Samsung group, the country’s largest conglomerate.

Commodities

Crude oil prices remained shaky amid uncertainty about producer countries’ dedication to planned output cuts. Brent, the international benchmark, was down 0.2 per cent at $55.77 in Asia while West Texas Intermediate, the US marker, was up 0.2 per cent at $52.51 a barrel.

Gold held firm in the face of a stronger dollar, notching a slight rise of 0.1 per cent to $1,203.92 that put it on track for a seventh consecutive session of gains.

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