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Asian markets edge up

Asian markets edge up

HONG KONG, Oct 13: Asian investors headed into the weekend cautiously upbeat on Friday after US traders took a breather from their recent run of records while uncertainty about Donald Trump's tax plans are keeping the dollar reined in, reports AFP. Wall Street's three main indexes stepped back after clocking up a number of all-time highs in recent weeks fuelled by hopes for the earnings season and confidence the US economy is in good shape. But dealers across Asia built on the previous day's gains, with Tokyo pushing on after hitting a 21-year high earlier in the week-although Shanghai and Hong Kong went into retreat ahead of the release of Chinese trade data. Japan's Nikkei was up 0.2 percent by the break, the benchmark Nikkei 225 index rose 0.23 percent, or 48.78 points, to sit at 21,003.50 by the break while the broader Topix index inched down 0.05 percent or 0.88 points, to 1,699.25. The robust US economy has been a main driver for the Japanese stock market but investors are also growing more confident about the prospects for domestic growth, Okasan Online Securities said. "When the domestic economy is good, expectations grow for stocks sensitive to domestic demand, especially the retail sector," it said in a commentary. Fast Retailing, a market heavyweight, jumped 3.5 percent to 36,070 yen after the Uniqlo operator said Thursday that annual net profit more than doubled from a year ago to a record high thanks to strong sales and as a cheaper yen inflated profits. Supermarket and convenience store operator Seven & i Holdings rose 2.43 percent to 4,535 yen after it reported better-than-expected operating profit for the second quarter. However, Kobe Steel dived 8.73 percent to 805 yen by the break, losing about 40 percent since the start of the week after it admitted falsifying strength and quality data for an array of products. The fresh plunge came after a report that its widening quality scandal has spread to more than 30 foreign customers, including Boeing, General Motors, and French automaker PSA, in addition to wide sections of Japan Inc. Automakers were lower with Toyota down 0.79 percent at 6,870 yen and Nissan off 0.78 percent to end the morning at 1,081 yen. Shares in Japan's Kobe Steel dived Friday on a report that its widening quality scandal has spread to more than 30 foreign customers, including Boeing, General Motors, and French automaker PSA. The Tokyo-listed firm fell almost nine percent to end the morning at 805 yen ($7.20), down about 40 percent since the start of the week after it admitted falsifying strength and quality data for an array of products, a practice that may have started a decade ago. The embarrassing scandal for Kobe Steel-a venerable firm that once employed Prime Minister Shinzo Abe-has already hit wide sections of Japanese industry, including automakers Toyota, Nissan and Honda which used the affected materials in their vehicles. But Japan's leading Nikkei business daily reported Friday that those products were also used in planes built by Boeing and Airbus and vehicles made by General Motors, Tesla, and Daimler. On Thursday, the CEO of Japan's number-three steelmaker warned that the quality control crisis was likely to widen at home and abroad, as he acknowledged that trust in the steelmaker has "fallen to zero". The firm is expected to hold a news briefing later Friday. Kobe Steel has admitted falsifying quality data for products sold to some 200 clients. It is the latest in a string of quality control and governance scandals to hit major Japanese businesses in recent years, undermining the country's reputation for quality. The quality specifications were based on agreements between the firm and its clients. The affected products include steel wires used in car engines and tyres-a key company product-as well as aluminium found in Japan's bullet trains as well as materials in high-speed trains in Britain, although it is not clear whether the scandal hit product safety. "If it was found that there are safety problems (with steel wires) it could shake the foundation of Kobe Steel," Takayuki Atake, manager of credit research at SMBC Nikko Securities, said in a report. Sydney climbed 0.2 percent and Singapore added 0.3 percent. Seoul and Wellington each added 0.2 percent, and there were also gains in Manila and Jakarta. The dollar was struggling to break out against its major peers as questions swirl over the future of Trump's promised tax plans, with some members of his Republican party said to be concerned about the possible effects on the country's debt mountain. Last month's release of a proposal outlining massive changes to the tax code boosted the greenback but the unit has pared some of those gains. "There appeared to be a significant compromise brewing amongst Republicans (on Thursday) but given the bloated nature of the current tax code, for every compromise tabled there seems to be another band-aid fixed elsewhere," said Stephen Innes, head of Asia-Pacific trading at OANDA. "Understanding and patience will be the name of the game for this to pass but it would not surprise me if we found ourselves back dead in the water next week." Easing concerns about Spain's Catalan independence crisis provided support to the euro. And the pound, which has been hurt by uncertainty surrounding Prime Minister Theresa May, was up after a report in a German newspaper saying Britain could get a two-year extension to complete Brexit as officials haggle over terms of the divorce. Investors will be closely following the release later Friday of US consumer inflation data for September, which will give a clue about the Federal Reserve's plans for hiking interest rates. The reading follows an upbeat reading on producer prices. With some on the Fed's policy board calling for early rate hikes to avoid sharper increases further down the line, there are other who argue for a wait-and-see approach on inflation, which is leaving markets on tenterhooks. Traders are also keeping tabs on the race to replace Fed boss Janet Yellen, whose term finishes early next year. Of the two front-runners according to analysts, fiscal dove Jerome Powell is tipped to be ahead, which has weighed on the dollar.

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