ASIA MARKETS: Asian Markets Slip Amid Weakening Dollar
By Kenan Machado
Nikkei drops back below 20,000
The U.S. dollar weakened more in early Asian trading on Tuesday, pressuring equities after big gains a day earlier.
But trading volume remains thin as many market participants are away on vacation.
Fresh dollar selling began just as the bulk of Asia stocks markets opened, recently putting The Wall Street Journal Dollar Index down 0.2%. The Japanese yen and Australian dollar hit their strongest levels of the day versus the U.S. dollar, rising 0.1% and 0.3% respectively.
Australian stocks opened modestly higher but quickly slid; the S&P/ASX 200 was recently down 0.8% after seeing early strength on gains in iron-ore prices. BHP Billiton (>> BHP Billiton Limited) and Rio Tinto (>> Rio Tinto plc) opened higher, though gains have eased to 0.5%. Meanwhile, the country's major banks have fallen about 1%.
As the dollar moved back down toward Yen110.60, the Nikkei slid as well -- as it often does when the Japanese currency strengthens. It was recently down 0.3%, dropping below 20,000. Similar-sized declines were seen in Taiwan and South Korea .
"You may have a bit of correction once in a while, but from a long-term perspective returns are expected to be positive from Asia," said Andrew Gillan of asset manager Janus Henderson. He added that continued double-digit earnings growth makes regional stocks attractive.
Chinese stocks fell to session lows after the release of initial July trade data, which showed double-digit growth in both imports and exports. But indexes in Shanghai and Shenzhen weren't down more than 0.2%.