HONG KONG (AFP) - Japanese stocks soared on Monday (Mon 14) as the US dollar hit a four-month high against the yen on expectations of sharper hikes in US interest rates, but most other Asian markets were hit by worries about the impact of Donald Trump's presidency on global trade.
Stocks around the world have seen volatile trading since the tycoon's shock election win, with his pledge of big-spending measures and tax cuts leading to predictions of a surge in inflation and in turn higher borrowing costs.
The prospect of better and safer returns in the US has also led to an exodus from emerging markets and currencies, while the Mexican peso is also struggling owing to concerns about Trump's warning he will tear up a key trade deal.
By the end of the morning session Tokyo's Nikkei was up 1.5 per cent, with exporters rallying on the back of the weakened yen. The US dollar was at 107.45 yen, its highest mark since July.
"The Federal Reserve now face the conundrum of rising inflation expectations," Chris Weston, chief market strategist in Melbourne at IG, said, according to Bloomberg News.
The prospect of higher US interest rates battered higher-yielding currencies last week and on Monday South Korea's won was down 0.4 per cent, the Philippine peso fell 0.3 per cent and the Thai baht lost 0.1 per cent.
The Singapore dollar was trading at 1.4148 to the US dollar as at 11:40am, down 0.4 per cent from its close on Friday of 1.4090. It was down to 1.4180 at 9:25am. The Singdollar last closed above the 1.41 level on Feb 3.
Hong Kong stocks sank 1.4 per cent, extending a similar loss on Friday, while Sydney shed 0.8 per cent and Singapore fell one per cent.
Manila plunged 1.3 per cent and Jakarta was 2.4 per cent lower, with dealers concerned Trump's protectionist rhetoric could see him throwing up tariffs.
The dollar was also at record highs against the Mexican peso. The peso and Mexico's stock market have been hurt by fears Trump will follow through on campaign pledges to renegotiate the North American Free Trade Agreement, as well as pressure the country to pay billions of dollars for a giant border wall.
But Japanese investors were lifted by the weaker yen and news the economy grew more than expected in the third quarter as exports offset slack consumer spending.
Wellington also gained 0.5 per cent as a deadly earthquake in New Zealand's south island boosted construction firms on expectations of a rebuilding programme.
And Shanghai put on 0.2 per cent despite data showing below-forecast retail sales and industrial output for October.
Oil prices remained under pressure after Opec said last week it pumped a record amount of the commodity in October, while dealers are worried the producers' cartel will not be able to implement an earlier agreement to cut output.
With additional information from the Straits Times