Asian stocks rise as Wall Street selloff stops, NZ dollar tumbles

Asian stocks gained early on Thursday after seeing Wall Street shares halt their selloff, while the New Zealand dollar tumbled to a five-year low after the Reserve Bank there cut its overnight cash rate. -- PHOTO: AFP
Asian stocks gained early on Thursday after seeing Wall Street shares halt their selloff, while the New Zealand dollar tumbled to a five-year low after the Reserve Bank there cut its overnight cash rate. -- PHOTO: AFP

TOKYO (REUTERS) - Asian stocks gained early on Thursday after seeing Wall Street shares halt their selloff, while the New Zealand dollar tumbled to a five-year low after the Reserve Bank there cut its overnight cash rate.

MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.1 per cent. Tokyo's Nikkei added 1 per cent while Australian shares gained 0.9 per cent and South Korea's Kospi advanced 0.5 per cent.

US stocks jumped overnight, helped by gains in technology and financial shares. The Dow rose 1.3 per cent and the S&P 500 gained 1.2 per cent.

Wall Street had suffered through much of the week, weighed by concerns that the Federal Reserve would hike rates sooner rather than later, and fears its financial saga would see Greece defaulting on its debt.

In currencies, the New Zealand dollar slid to a five-year low of $0.7015 (0.67 Singapore cents) after the Reserve Bank of New Zealand cut rates for the first time in four years.

The kiwi took a further hit as the RBNZ, which had been hiking rates as early as last July, joined the rate-cutting club and said it would ease again if needed. "The RBNZ has again proved to be more flexible than the market gives it credit for," said Michael Turner, a strategist at RBC Capital Markets.

"The main message is that it's just very hard to find upside risks to inflation right now and the bank is getting on the front foot to push it higher."

The kiwi last traded at $0.7042, down 2.2 per cent on the day. Its Australian counterpart was down 0.4 per cent at $0.7732 .

The yen stood taller against the dollar after Bank of Japan Governor Haruhiko Kuroda said the Japanese currency is already"very weak." The greenback traded at 122.91 yen, having pulled sharply away from a 13-year high of 125.86 touched Friday on robust U.S. non-farm payrolls data.

The euro was down 0.1 per cent at $1.1308. The common currency has gained 1.8 percent so far this week, helped by an ongoing spike in euro zone debt yields.

German benchmark 10-year Bund yields rose above 1 percent overnight for the first time since September as the market's long-term inflation expectations, a driver of the two-month assault on global bonds, hit three-week highs.

Climbing German yields have in turn pulled up U.S. and Japanese yields. The U.S. 10-year Treasury note yield rose to a nine-month high of around 2.5 percent overnight while the 10-year JGB yield was at a seven-month peak.

In commodities, U.S. crude gave up some of its gains from rallying overnight, when a big U.S. stocks drawdown boosted the outlook for summer fuel demand.

U.S. crude was down 0.5 per cent at $61.14 after jumping 2 per cent on Wednesday. Brent shed 0.3 per cent to US$65.48 after a 1 percent gain.