Japan Stocks Rally Again As Asia Struggles

Most major Asia stock markets wobbled around the flat line in Monday trading, while Japanese equities outperformed to hit a seven-month high as the yen weakened further against major rivals.

Japan’s Nikkei Stock Average  climbed 0.5% after hitting a level not seen since late April as investors returned from a three-day weekend.

Around the region, Australia’s S&P/ASX 200 index advanced 0.3%, while South Korea’s Kospi  traded flat.

Chinese shares started the week on a muted note, with Hong Kong’s Hang Seng Index  down 0.2% and the Shanghai Composite Index  trading with a 0.1% loss.

Euro-zone finance ministers were set to reconvene on Monday after failing to approve Greece’s latest tranche of aid last week, stoking caution in the markets, while traders also had “some doubts about the significance of the strong rally in U.S. markets on Friday,” given that it took place in holiday-thinned trading, said Ric Spooner, chief market analyst at CMC Markets.

“In these circumstances, many traders prefer a cautious stance, waiting to see if the market can hold these gains once [U.S.] trading returns to normal this week,” Spooner said.

Signs that U.S. retail sales could gather momentum going into the holiday season and optimism that the global economic backdrop was improving buoyed Wall Street on Friday.

Monday’s Japanese stock gains followed a 3.8% advance for the Nikkei Stock Average over the four trading days last week, as the yen weakened further. The dollar  advanced 1.3% against the yen last week, with the move bringing gains so far in November to 3.3%.

The yen has lately been under pressure from speculation of more monetary-policy easing.

Just ahead of the stock-market open on Monday, the Japanese central bank released the minutes of its Oct. 30 policy meeting — a meeting at which it decided to expand its asset-buying program — with the language underlining plans to “undertake further aggressive monetary easing.”

The central bank stood pat at a subsequent meeting last week — minutes for which have yet to be released — though it hinted more easing was to come.

Japan’s major exporters got a boost as the euro  broke above the 107-yen level early Monday to hit a seven-month high against the Japanese currency, before later falling back to ¥106.57.

The dollar traded  at ¥82.28, down slightly from ¥82.35 on Friday, while also giving up early strength.

Euro-exposed names were stronger on Monday. Canon Inc. rose 0.5% and Pioneer Corp. jumped 5.1%.

Tokyo-listed car makers were higher as well, with Toyota Motor Corp.  up 1.7%, Honda Motor Co.  gaining 1%, and Nissan Motor Co.  ahead by 2.4%.

On the deal front, a report Monday in the Nikkei business daily said the three top shareholders in struggling microchip maker Renesas Electronics Corp.   were set to buy the firm out as previously tipped, sending Renesas shares jumping 16.6%.

Hitachi Ltd.  , up 0.2%, and NEC Corp.  , trading flat, were both among the reported buyers of Renesas. The third reported buyer, Mitsubishi Electric Corp.  , rallied 2%.

In Australia, Qantas Airways Ltd.   climbed 2.8% after an Australian Financial Review report over the weekend said that a group of former executives and investors had bought a stake in the firm.

Gains for energy and material firms offered broad support for the Australian market, with Beach Energy Ltd.  up 1.8%, and gold extractor Newcrest Mining Ltd.   advancing 1.6%.

In Hong Kong, investors weren’t so keen on energy firms, however, with losses for China Petroleum & Chemical Corp.   , down 1.8%, and China Shenhua Energy Co.  , lower by 1.4%, working to weigh on the market.

Away from energy, airline Cathay Pacific Airways Ltd.  fell 1.7%. Late Friday, the Hong Kong-listed carrier said that competition has pushed average economy-class ticket prices 4% lower compared to the previous year, while premium traffic suffered amid challenging global economic conditions.

Airlines listed on the Chinese mainland also weakened Monday, with Air China Ltd.  down 0.2% and China Eastern Airlines Corp.  falling 1% in Shanghai.

Losses for Samsung Electronics Co. weighed in Seoul, with the heavily weighted electronics major trading down 2.3%.

Arch-rival Apple Inc.  reportedly filed Friday to add six more Samsung products to its patent infringement lawsuit against the Korean firm.

In the Japanese consumer electronics sector, Sony Corp.  fell 1.6% while Panasonic Corp.  lost 0.3% as investors took their first chance to react to last week’s credit downgrade at Fitch. The ratings firm cut both companies to non-investment or “junk.”

Marketwatch