Asia report: Markets mostly higher, Nikkei falls on Abe resignation news

(Sharecast News) - Markets in Asia finished mostly higher on Friday, with Japan being a notable exception, as investors reacted to reports that Shinzo Abe would resign - which was confirmed by the Prime Minister after markets closed.
In Japan, the Nikkei 225 was down 1.41% at 22,882.65, as the yen strengthened 0.67% against the dollar to last trade at JPY 105.86.

Of the major components on the benchmark index, robotics specialist Fanuc was down 0.83%, Uniqlo owner Fast Retailing lost 3.2%, and technology giant SoftBank Group was 3.34% weaker.

The broader Topix index lost 0.68% by the end of trading in Tokyo, to settle at 1,604.87.

Japanese media reported during the day that Prime Minister Abe was about to resign, with the Nikkei citing his health as being behind the move.

He later confirmed his surprise resignation in a press conference after Tokyo's bourse closed for the week.

"Japanese stocks fell 1.4%, as measured by the Nikkei 225 index, on talk that Prime Minister Shinzo Abe is stepping down for health reasons, subsequently confirmed after Japan's market close," said AJ Bell investment director Russ Mould.

"A change in leader is likely to raise speculation of a shift in strategy to boost the country's economy and drive inflation."

On the mainland, the Shanghai Composite was up 1.6% at 3,403.81, and the smaller, technology-heavy Shenzhen Composite added 1.97% to 2,305.62.

South Korea's Kospi was 0.4% firmer at 2,353.80, while the Hang Seng Index in Hong Kong was 0.56% higher at 25,422.06.

The blue-chip technology stocks were both weaker in Seoul, with Samsung Electronics down 0.36% and chipmaker SK Hynix off 1.64%.

Investors spent the earlier parts of the session digesting the news of a major policy shift from the US Federal Reserve, after chair Jerome Powell announced the central bank would focus on "average inflation targeting" overnight.

That meant the Fed would allow inflation to run above its median 2% target after periods when it has run below that, and vice versa.

It also changed its definition of full employment in a way that meant it would be less compelled to hike interest rates after a fall in the unemployment rate.

"Markets haven't got over-excited by the US Federal Reserve's new stance on letting inflation run higher, despite it implying that interest rates will stay lower for longer - normally something that would benefit equities," Russ Mould noted.

"One could argue that the Fed following this path was already expected by the market, hence why stocks haven't surged ahead."

Oil prices were lower as the region entered the weekend, with Brent crude last down 0.24% at $44.98 per barrel, and West Texas Intermediate losing 0.28% to $42.92.

In Australia, the S&P/ASX 200 went against the regional trend to fall 0.86% to 6,073.80, although the country's big four banks advanced in Sydney.

Australia and New Zealand Banking Group was ahead 0.38%, Commonwealth Bank of Australia rose 0.03%, National Australia Bank was up 0.73%, and Westpac Banking Corporation added 0.92%.

Across the Tasman Sea, New Zealand's S&P/NZX 50 was ahead 0.33% at 12,093.52, after a fourth consecutive day of trading being disrupted by cyberattacks.

The exchange operator NZX said it had roped in New Zealand's Government Communications Security Bureau to help deal with the attacks.

Shares in NZX were down 2.96% by the close in Wellington.

Both of the down under dollars were stronger on the greenback, with the Aussie last ahead 0.81% at AUD 1.3665, and the Kiwi advancing 0.76% to NZD 1.4948.