Asia markets mixed; eyes on US talks

AFP/Tokyo

The dollar edged up slightly against the yen after falling in New York trade ahead of a US Federal Reserve meeting that begins later in the day, with expectations it will announce more monetary easing.

Tokyo ended flat, edging down 8.42 points to 9,525.32, Sydney gained 0.4%, or 18.1 points, to end at 4,576.0 while Seoul added 0.37% or 7.2 points to 1,964.62.

Hong Kong ended 0.21% higher, adding 47.22 points to close at 22,323.94, while Shanghai shed 0.44%, or 9.07 points, to 2,074.70.

In other markets; Taipei was flat, adding 4.19 points to 7,613.69; Manila surged 1.29%, or 73.96 points, to 5,831.50; Wellington fell 0.11%, or 4.59 points, to 4,026.18; Jakarta ended up 0.36%, or 15.31 points, at 4,317.92; Kuala Lumpur shares rose 0.58%, or 9.42 points to 1,641.57; Singapore rose 0.13%, or 3.99 points to 3,118.33, while Bangkok rose 0.48% or 6.38 points to 1,341.33.

In Hong Kong, banking giant HSBC rose 0.3% after it said it will pay a record $1.9bn settlement in the US over allegations of money laundering.

And fellow British lender Standard Chartered was up 0.60% after being told by the US Treasury to pay the US $327mn to settle charges it violated US sanctions on Iran, Myanmar, Libya and Sudan.

Talks in Washington aimed at agreeing a plan to avoid hundreds of millions of dollars in tax hikes and spending cuts taking effect on January 1 were said to be progressing, with President Barack Obama saying he was open to compromise.

If there is no deal the US economy will likely tip back into recession.

Buoyed by last month’s re-election, Obama has said a deal will not be done unless there are tax rises for the rich—an idea his Republican rivals have previously set themselves dead against.

However, reports said he and Republican House Speaker John Boehner were making headway.

Joe Bracken, BT Investment Management head of macro strategies in Sydney, said traders were buying higher yielding assets, reflecting their confidence.

“There is a mild risk-on sentiment because of expectations that the fiscal cliff situation will be resolved,” he told Dow Jones Newswires. “If it does get resolved, you are going to have a very good start to 2013.”

The Federal Reserve’s policy committee began its two-day meeting yesterday and traders were keeping an eye on what it will do as the end approaches of its “Operation Twist”—selling short-term debt to buy longer-term debt.

There are signs policymakers will replace it with more outright bond purchases, or “quantitative easing”, aimed at lowering interest rates to encourage businesses to invest and hire.