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Markets Update

Japanese stocks lead gains in Asia on Thursday

Japanese stocks led gains in Asia on Thursday despite disappointing trade figures that showed exports had fallen for a fourth straight month.

The Nikkei 225 closed up 2.28% to 16,196.80 points.

Rising oil prices supported investor sentiment through the trading day together with better-than-forecast US economic data released earlier.

Toyota’s shares closed up 1.71% in Tokyo trade despite a global recall of several million vehicles.

The firm said in the event of a crash, some seatbelts on a range of vehicles could be damaged by a metal seat frame part.

Toyota Australia said it was recalling approximately 98,000 RAV4 vehicles built between August 2005 and November 2012 due to the issue, but that no accidents had occurred as a result of the problem.

“The repairs will take approximately 60 minutes and will be conducted free of charge,” said Toyota.

Australia’s ASX 200 index closed higher, up 2.25% to 4,992.00 points.

Big energy companies supported the index with giants like BHP up more than 6% on higher oil prices.

In China, markets were in positive territory for much of the day. Hong Kong’s Hang Seng index closed up 2.32% to 19,363.08.

However, the Shanghai Composite ended flat, down 0.16% to 2,862.89.

Fresh official numbers showed that inflation in China rose to 1.8% in January, slightly weaker than analysts expected.

Elsewhere, South Korea’s Kospi index finished up 1.32% to 1,908.84 in line with the rest of the region.

Rising oil prices supported investor sentiment through the trading day together with better-than-forecast US economic data released earlier.

Toyota’s shares closed up 1.71% in Tokyo trade despite a global recall of several million vehicles.

The firm said in the event of a crash, some seatbelts on a range of vehicles could be damaged by a metal seat frame part.

Toyota Australia said it was recalling approximately 98,000 RAV4 vehicles built between August 2005 and November 2012 due to the issue, but that no accidents had occurred as a result of the problem.

“The repairs will take approximately 60 minutes and will be conducted free of charge,” said Toyota.

Australia’s ASX 200 index closed higher, up 2.25% to 4,992.00 points.

Big energy companies supported the index with giants like BHP up more than 6% on higher oil prices.

In China, markets were in positive territory for much of the day. Hong Kong’s Hang Seng index closed up 2.32% to 19,363.08.

However, the Shanghai Composite ended flat, down 0.16% to 2,862.89.

Fresh official numbers showed that inflation in China rose to 1.8% in January, slightly weaker than analysts expected.

Elsewhere, South Korea’s Kospi index finished up 1.32% to 1,908.84 in line with the rest of the region.

Europe:

The FTSE 100 is down 0.5%, with hefty losses for mining shares.

In Frankfurt the Dax is 0.2% higher, helped by strong shares in energy companies.

Perhaps the most dramatic move among Europe’s biggest shares though is in Paris, where the bank Credit Agricole is 15% higher. That’s helped the Cac-40 index to a 0.2% gain.

In currencies, the greenback dipped against the yen and euro on dovish comments from a top Fed official.

It would be “unwise” for the central bank to continue hiking rates given declining inflation expectations and recent equity market volatility, St. Louis Fed President James Bullard said late on Wednesday in comments that mark a stark change of direction for one of the Fed’s more hawkish inflation foes.

The dollar slipped 0.1 percent to 113.98 yen , putting further distance between a peak of 114.875 touched earlier this week. The euro nudged up 0.1 percent to $1.1137

The Canadian dollar touched a two-week high of C$1.3655 

The Australian dollar, another commodity-linked currency, was down 0.4 percent at $0.7153  with weaker-than-expected local employment data slicing off a chunk of its overnight gains made on rallying oil.

Spot gold XAU= was nearly flat at $1,2089.00 an ounce. The precious metal had managed to snap a three-day losing streak on Wednesday after the Fed’s meeting minutes showed policymakers had considered altering their rate hike path.

As the Fed embarked on its first rate hike in a decade late last year, the prospect of higher interest rates weighed on non-yielding gold and pushed prices to near six-year lows. But the metal rebounded to a one-year high of $1,260.60 an ounce last week in the wake of the turmoil in global markets.

In debt markets, higher equities and encouraging U.S. housing and industrial output data pushed the benchmark 10-year Treasury yield to a 9-day high of 1.8470 percent US10YT=RR on Wednesday. The 10-year note yielded 1.8104 percent in Asia.

US Federal Reserve worried about increasing economic risks

Records released on Wednesday showed that members were worried that a global economic slowdown could hurt the US.

Policymakers agreed that “uncertainty had increased” since the decision to raise interest rates in December.

Some members felt that tighter economic conditions would be “roughly equivalent” to further hikes.

Members of the central bank voted unanimously to raise the Fed’s key interest rate by 25 basis points – to between 0.25% and 0.5% – in December.

Since that decision, oil prices have continued to fall and global share markets have been highly volatile.

Testifying before Congress last week, Fed chairwoman Janet Yellen warned that growth in the US economy could be hurt by global conditions.

The economic slowdown in the China and other emerging nations was noted as a factor that could “drag on the US economy”.

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