Asian shares mixed as risks of no-deal Brexit resurface

Asian shares traded mixed on Wednesday afternoon, as risks of a no-deal Brexit ramped up again overnight.

In mainland China, the Shanghai composite was down 0.16 percent, while the Shenzhen composite rose 0.45 percent. The Shenzhen component was up 0.33 percent.

Hong Kong’s Hang Seng index was flat.

Japan’s Nikkei 225 lost 0.54 percent, while the Topix slumped 0.58 percent.

Japan’s exports fell 7.9 percent in November from a year earlier, declining for the 12th straight month, according to data from the country’s Ministry of Finance on Wednesday.

However it still beat a forecast of a 8.6 percent drop in a Reuters poll, and was better than the 9.2 percent decline in October.

Imports, however, did worse than expected, falling 15.7 percent as compared to an estimated 12.7 percent.

Over in South Korea, the Kospi was flat, as was Australia’s S&P/ASX 200, with banks and major miners declining.

Overall, MSCI’s broadest index of Asia-Pacific shares outside Japan was flat.

Meanwhile, Brexit risks flared amid reports on Tuesday that U.K. Prime Minister Boris Johnson will amend the Brexit bill, explicitly ruling out any extension to the transition period beyond December 2020. The U.K. is due to leave the EU by January 31.

That would leave little time to reach a trade deal with the European Union, raising the risks of a no-deal Brexit.

The British pound dropped more than 1 percent to $1.3188 against the dollar on Tuesday after the reports, and has since fallen further. It was last at $1.3105.

Rodrigo Catril, senior foreign exchange strategist at the National Australia Bank, called the development a “smart move” by Johnson, who now has a stronger negotiating position.

“From a strategic move one could argue that this is a smart move by the PM, forcing the EU to come to the table and push for an agreement in 2020 without the option of kicking the can yet again,” he wrote in a morning note.

“The move suggest GBP path in 2020 looks set to be a volatile one, a hard Brexit cannot be ruled out, but the probability of a positive Brexit resolution has also increased,” Catril said, adding that the possibility remains that Johnson could still introduce a new bill for an extension next year.

Exporters in Asia were watched on Wednesday for reaction to that news. Autos in Japan declined in the morning, with Mitsubishi down 0.83 percent, and Honda declining 0.47 percent. Toyota lost 0.40 percent, and Suzuki tumbled 0.49 percent.

In other news, the Hong Kong Stock Exchange wants to cut the time between pricing an IPO and the shares trading to a single day by as early as late 2020, according to a Reuters report, citing a senior executive.

Currencies and oil