By Daniel Inman
Further signs of improvements in global manufacturing pushed
Asian stocks higher on Tuesday, with Japan leading the gains as the
yen weakened towards to the Yen100-to-the-dollar mark.
Positive manufacturing data from Europe on Monday supported
regional sentiment, after Markit's euro-zone purchasing managers
index rose to 51.4 in August from 50.3 in July - with a score above
50 indicating an increase in factory activity. In terms of
individual countries, the readings from both Germany and Italy were
particularly strong.
The factory figures from Europe added to an upbeat picture from
China, where on Sunday the country's official PMI hit a
sixteen-month high. This added to a picture of stability in Asia's
largest economy and resulted in strong gains for the region's
markets.
The yen (USDJPY) was weaker against the U.S. dollar as investors
unwound their safe-haven positions amid signs of improvement in
global manufacturing. The dollar was at Yen99.52 in early Asian
trade Tuesday, compared with Yen99.33 late Monday in New York, and
adding to a 1.2% gain in the previous session.
The yen's weakness towards the much-watched Yen100-to-the-dollar
mark, a level that has not been breached since July, gave Japanese
stocks a boost on Tuesday. The Nikkei rose 2.6%.
Auto makers benefited from the weaker yen in Tokyo, with Toyota
Motor Corp. (TM) up 2.8% and Honda Motor Co. (NSANY) rising 2%.
Hong Kong's Hang Seng Index added 1.2% as Chinese companies
continued to outperform off the back of Monday's manufacturing
numbers. The Hang Seng China Enterprises Index was last up
2.3%.
Shanghai Composite rose 0.1% in the mainland.
Australia's S&P ASX 200 was up 0.2% ahead of the Reserve
Bank of Australia's policy announcement later in the session.
Although there are little expectations of a change in monetary
policy, a surprise could impact both local stocks and the
currency.
Miners in Sydney made strong gains as the price of iron ore rose
over night: Rio Tinto (RIO) rose 2.7% and Fortescue Metals Group
was 4.5% higher.
Elsewhere in the region, South Korea's Kospi was up 0.4% and
Taiwan's Taiex gained 0.6%.
There was no lead from the U.S. on Tuesday, as Wall Street was
closed on Monday for the Labor Day public holiday. Later in the
week, the U.S. will release its monthly labor report, which will be
looked at as a sign over whether the Federal Reserve will roll back
its stimulus.
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