Asian shares rocket as Japan’s economy grows

<p>Asian stocks rocketed higher today, fueled by news that the Japanese economy grew for the first time in a year. The MSCI Asia Pacific index […]</p>

Asian stocks rocketed higher today, fueled by news that the Japanese economy grew for the first time in a year. The MSCI Asia Pacific index was around 1.4% higher in early afternoon trading, paring back some of last week’s losses.

Japanese GDP grew at an annualised 6% in the quarter ending September, mostly in line with market expectations. Growth was driven by the resumption in exports, driven by auto makers for example – the same companies which are feeling the pressure of the strong Japanese Yen and pushing authorities to limit the appreciation. The Yen continued to rally against the US dollar during today’s session, with the USD/JPY last trading slightly above 77.12.

Staying on currencies, the unease in the U.S. on China’s currency valuation seems to be rising as President Barack Obama remarked “enough is enough”. The news shows the political pressure Obama faces going into an election year in 2012 with an unemployment rate above 9%.

We think more rhetoric from U.S. policymakers will be forthcoming but this is unlikely to sway the Peoples Bank of China (PBOC), which has so far done a good job in containing inflation while still managing healthy growth.

In energy markets, Brent crude remains above US$114/per barrel while Nymex light crude last settled above US$99/per barrel. Energy traders continue to eye Middle East tensions closely. As is the case with China’s currency, some speculate President Obama will be forced to take tighter action against Iran as Republican candidates continue their criticism.

Build your confidence risk free
Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.