Tokyo stocks gain despite currency


Honda stock took a knock in Tokyo, with the central bank stepping in to arrest yen strength and boost exports

By staff and wire reports

HONG KONG, China -- Tokyo stocks gained on Monday, despite currencies strengthening and eating into the stock prices of major exporters.

Both the Topix and the Nikkei gained just over 1 percent in Japan. Hong Kong gained around half a percent.

China's markets stormed ahead after the government acted to prop its fall. But most other Asian equity markets fell.

Australia and New Zealand both lost ground. Taiwan fell almost 1.5 percent, after a strong showing last week.

Singapore is trading lower in the afternoon session, shortly before the close.

BOJ steps in

In Tokyo, the central Bank of Japan stepped into the currency market during the Asian lunchtime on Monday to ward off the yen's run of strength.


China's markets shot up on Monday after the government acted to stem a prolonged slump in 2002

The currency stands at 121.44 to the U.S. dollar. Traders joke that there is a "World Cup" effect in the currency markets.(Full Story)

South Korea on Monday said it had instead set up a $2 billion currency swap with China. That indirect link to prop the currency integrates the won more completely than the yen.

The won stands at 1213.4 to the U.S. dollar from Kookmin Bank in Seoul.

In Japan, the Topix index ended up 1.09 percent at 1013.23. The Nikkei closed up 1.13 percent at 10,471.32.

Car companies generally up

Honda Motor Co. fell 2.45 percent to 4780 yen despite the BOJ's action. Central bank intervention aims to quell rapid moves in the currency and aid exporters.


The BOJ acted during the Asian lunchtime, which can catch the market short-handed, but the effect on the yen is typically short

Toyota Motor Corp. got a rise, up 0.98 percent to 3080 yen. Nissan Motor Co. also gained 0.24 percent to 819 yen.

The yen hit a seven-month low against the dollar on Friday, at 120.80 to the buck.

In Seoul, South Korea's Kospi index closed down 1.36 percent at 767.92. Hyundai Motor fell 3.2 percent to 36,700 won after its union rejected an offer on wages, suggesting a worker strike is in the offing.

The stock market did not respond this time to the Red Devil soccer team's victory in the World Cup quarter-final against Spain over the weekend.

Korea is the first Asian qualifier to reach the semifinals. Turkey, which straddles Asia but qualified from Europe, tackles Brazil on Wednesday.

Currency concerns did not aid Hyundai Heavy Industries, the world's largest shipbuilder. It dropped 6 percent to 26,000 won as its ships became more expensive.

Taiwan suffers after recent gains

In Taiwan, the Taiex fell 1.39 percent to 5384.89. That is its lowest close this year. The New Taiwan dollar also hit a 12-month high on Friday, of T$33.86 to the greenback.

It stands at T$33.59 on Monday. Tech stocks took the knock from Nasdaq's fall again (Friday roundup). Taiwanese stocks were also lagging back from a strong showing on Friday.

In Australia, the S&P/ASX 200 index fell 0.52 percent to 3235.3, with U.S. doubts again weighing on the market.

News down in Sydney

News Corp., the largest stock listed in Sydney, dropped 4.6 percent to A$10.47. It gets most of its earnings from the United States. As well, its deal to take over Italian pay-TV company Telepiu may be in doubt.

But the selloff was not wholesale. Insurance stocks and other defensive plays gained. Qantas Airways put on 4.4 percent to A$4.56 after upgrading its profit outlook.

Newcrest Mining gained 3.4 percent to A$8.02 on a report it will unveil higher gold reserves.

New Zealand's Top 40 index ended down 1.44 percent at 2100.23, its biggest loss this year. Telecom New Zealand dropped 2.1 percent to NZ$5.09.

China stocks race ahead

Hong Kong's Hang Seng index closed up 0.62 percent at 10,657.34. Its currency is weakening with the U.S. dollar. But most of Monday's focus was on China plays.

The H share index of companies that operate mainly in China gained 2.36 percent to 2186.01.

China's government has scrapped a plan to sell its shares. China stocks skyrocketed, with the Shanghai B share market up 9.67 percent and the Shenzhen B share market up 9.73 percent.

Singapore stocks are down 0.45 percent at 1539.30 in late trade.