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The yen traded near a five-year low against the dollar, boosting earnings prospects for exporters, as the Nikkei 225 (NKY) rose after topping 16,000 for the first time since 2007 yesterday. China's benchmark money-market rates slid.
Japan's currency fell 0.1 percent at 10:49 a.m. in Tokyo, weakening for a third day. Both the Nikkei 225 and Shanghai Composite Index (SHCOMP) climbed 0.2 percent, with trading volumes down more than 20 percent from the 30-day average. Most Asian bourses are closed for Christmas. China's seven-day repurchase rate, a gauge of funding availability, extended losses for a second day after the central bank injected funds into the financial system.
Japan released its economic report for December yesterday, dropping deflation from its view for the first time since 2009. Bank of Japan Governor Haruhiko Kuroda speaks at a business lobby group today. U.S. reports showed orders for durable goods and new-home sales rose more than forecast in November, underscoring economic confidence expressed by the Federal Reserve this month when it said it will begin reducing stimulus.
"If we continue to have more strong economic numbers from the U.S., there's a high possibility the yen could weaken to 105 per dollar," said Yasuhiro Kaizaki, the vice president of global markets in New York at Sumitomo Mitsui Trust Bank Ltd. "The divergence in monetary policy between the U.S. and Japan is the main driver of dollar-yen."
Yen, China
The yen, which has tumbled 15 percent this year, the most among 10 developed-market currencies tracked by Bloomberg Correlation-Weighted Indexes, slid to 104.34 per dollar after touching 104.64 on Dec. 20, the weakest since October 2008. It declined 0.05 percent to 142.68 per euro, near the five-year low of 142.90 reached last week. Europe's shared currency was little changed at $1.3677.
About two shares fell for every one that rose on the MSCI Asia Pacific Index, which decreased 0.2 percent. SoftBank Corp. was the biggest drag on the index, sliding 1 percent on a Nikkei newspaper report that it's seeking to buy T-Mobile U.S. Inc. Fast Retailing, Asia's biggest apparel chain, led gains in the Nikkei, jumping 3 percent.
The Shanghai Composite headed for a third day of gains, led by technology companies. The seven-day repo fell 77 basis points to 5.67 percent today, according to a weighted average compiled by the National Interbank Funding Center.
Taiwan's benchmark index climbed 0.3 percent. Thailand's baht was little changed at 32.715 per dollar after falling yesterday to the lowest level since June 2010 in a sixth day of declines amid political unrest.
S&P 500
The S&P 500 Index extended record highs yesterday, closing up 0.3 percent on lower-than-average volume before the Christmas holiday. About 2.6 billion shares changed hands in the U.S., the fewest since last Christmas Eve.
The gauge has rallied almost 29 percent this year, putting it on course for its biggest annual gain since 1997. The Fed said on Dec. 18 it will reduce the pace of bond buying amid faster-than-estimated economic growth.
Bookings for goods meant to last at least three years rose 3.5 percent in November after a 0.7 percent drop the prior month, a Commerce Department report showed yesterday. Purchases of new U.S. homes also exceeded projections in November, holding near a five-year high and showing the housing recovery was gaining momentum even as mortgage rates climbed.
Rubber futures in Tokyo rebounded 0.7 percent today after falling as much as 2.8 percent to 275 yen a kilogram yesterday, the most since September.
Gold was little changed at $1,204.75 an ounce.
To contact the reporter on this story: Katrina Nicholas in Singapore at knicholas2@bloomberg.net
To contact the editor responsible for this story: Allen Wan at awan3@bloomberg.net
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