HONG KONG: Asian markets were mostly up on Monday as traders gave a tentative welcome to an agreement by the Group of 20 nations to avoid a potential currency war and work to resolve global trade imbalances.
Finance ministers and central bankers ended a two-day meeting in South Korea Saturday saying they would not take part in "competitive devaluation" and would move to tackle large current account surpluses, although they shied away from specific targets.
Hong Kong rose 0.94 percent by the break and Shanghai was 1.89 percent higher in the afternoon, while Seoul gained 0.97 percent, or 18.40 points, to end at 1,915.71.
But Tokyo fell 0.27 percent, or 25.55 points, to 9,401.16 as the dollar hit a new 15-year low on expectations the US Federal reserve will announce monetary easing measures to kickstart the economy, effectively printing money.
The greenback fell to 80.66 yen at one point, its lowest since April 1995, before picking up to 80.78 but was down from 81.34 in New York on Friday.
The euro fetched 1.4023 dollars, up from 1.3949. It bought 113.67 yen from 113.24 Friday.
"The US dollar is weakening because of the agreement out of the G20 finance ministers meeting, namely that there’s not going to be competitive currency devaluations," Victor Shum, an analyst with energy consultancy Purvin and Gertz in Singapore, told AFP.
"The market interpreted the agreement as a go-ahead signal to the United States to do a second round of quantitative easing, so the dollar is heading down."
The meeting led to an agreement to "refrain from competitive devaluation of currencies" and aim for "more market-determined exchange rate systems".
The finance ministers and bankers vowed to "pursue the full range of policies conducive to reducing excessive imbalances and maintaining current-account imbalances at sustainable levels".
However, the talks did not come up with a specific target for reducing current account surpluses or deficits.
"The G20 went a step in the right direction toward easing global exchange rate tensions," Morgan Stanley said in a client note cited by Dow Jones Newswires.
"That said, the overall communiqué is heavy on ambition but light on immediate action. In that sense, we do not think the market reaction will be substantial."
Ahead of the meeting, which laid the groundwork for a summit in Seoul on November 11-12, fears had grown of a currency conflict in which countries would keep their units artificially low to boost exports in the aftermath of the global downturn.
The United States is pushing China to allow its currency to rise and reduce its huge trade surplus. Japan, South Korea and Indonesia among others have intervened unilaterally in recent weeks to curb their currencies’ advances.
Traders said markets will now be looking to next week’s meeting of the Fed at which it is tipped to unveil its monetary easing measures.
The central bank’s decision will be shaped by data this week on gross domestic product and consumer confidence.
Sydney jumped 1.33 percent, or 61.8 points, to 4,710.0 after the Singapore Exchange offered to buy it in a deal worth 8.2 billion US dollars that would create a Asia-Pacific trading hub to rival Hong Kong and Shanghai.
Reports said a merger would create the world’s fifth biggest stock exchange.
ASX Ltd, which had been in a trading halt since Friday, surged 19.42 percent to end the day at 41.75 Australian dollars.
SGX shares in Singapore were 5.24 percent lower at 9.04 Singapore dollars in the afternoon while the broader market rose 0.42 percent.
New York’s main oil contract, light sweet crude for delivery in December, rose 91 cents to 82.60 dollars a barrel in afternoon trade and Brent North Sea crude jumped 66 cents to 83.62 dollars.
Gold opened at 1,336.00-1,337.00 US dollars an ounce in Hong Kong, up from Friday’s close of 1,317.00-1,318.00 dollars.
