Tokyo stocks, dollar surge but Shanghai dives

People pass by Japan’s Nikkei stock index displayed on an electronic board in Tokyo on Thursday, May 28, 2015. Asian stocks were mostly lower Thursday as a deadline for Greece to make a debt payment neared. AP PHOTO/SHUJI KAJIYAMA

HONG KONG–Japan’s Nikkei stock index climbed for a 10th straight day Thursday as the dollar advanced to a 12-year high against the yen, but Shanghai plunged after a more than 15 percent surge in the past eight sessions.

Wall Street provided an ideal lead, with the Nasdaq surging to a new record high, while the euro edged up slightly as investors watch with trepidation snail-paced talks between Greece and its creditors over reforming its bailout.

Tokyo rose 0.39 percent, or 78.88 points, to finish at 20,551.46, the longest winning streak since a 13-day run in February 1988. Seoul added 0.16 percent, or 3.39 points, to 2,110.89.

However, Shanghai slumped 6.50 percent, or 321.45 points, to 4,620.27 on speculation authorities will introduce measures to cool the market’s recent rally. Hong Kong tracked the losses, sinking 2.23 percent, or 626.90 points, to 27,454.31.

Sydney ended 0.21 percent, or 12.2 points, lower at 5,713.1.

The dollar has resumed its bull run against the yen on growing expectations that the Federal Reserve will hike interest rates by the end of the year while Japan’s central bank is tipped to embark on more monetary easing to kickstart a soporific economy.

The chances of a hike have increased following upbeat US data this week and comments from Fed boss Janet Yellen on Friday that rates would go up “at some point this year.”

On currency markets the dollar climbed to 124.30 yen at one point in Tokyo–its highest since late 2002–before paring the gains to 123.70 yen later in the day. That compares with 123.63 yen late in New York.

“It’s likely that the yen will continue to slowly weaken and we’ll have a global risk-on mode, stocks won’t rise too quickly but they’ll have a steady climb,” Mitsushige Akino, executive officer at Ichiyoshi Asset Management Co in Tokyo, said.

“The US economy is OK and as Yellen said recently, the US is trying to raise rates,” he said.

The Nasdaq jumped 1.47 percent to another record, the Dow added 0.67 percent and the S&P 500 gained 0.92 percent.

‘Final stretch’

The euro edged up to $1.0935 and 135.24 yen against $1.0906 and 134.83 yen in New York but traders are keeping close tabs on events in Europe as a deadline for Greece to repay some of its debts approaches on June 5.

Greek Prime Minister Alexis Tsipras said on Wednesday his country was “in the final stretch” of talks with its EU-IMF creditors on an agreement to release bailout funds that are needed for it to service its debts.

However, EU sources said a meeting in Brussels between the two sides had been delayed by several hours, while European Commission Vice-President Valdis Dombrovskis earlier said there were important areas still to be resolved.

There are fears that if Athens defaults it could tumble out of the eurozone, which would likely roil global markets.

In Shanghai, investors sold up as talk emerged of regulatory moves to pour water on stocks, while brokerages also tightened rules on lending.

“There’s some talk about the securities regulator ordering banks to report on inflows into stocks and financial products,” said Clement Cheng, a Hong Kong-based trader at RBC Investment Management. “Tighter margin lending and an upcoming big week for IPOs constrain some liquidity.”

Oil prices rose in Asia on expectations that the latest US stockpiles report will show a further dip in crude reserves as traders worry about a global oversupply.

US benchmark West Texas Intermediate for July delivery rose 12 cents to $57.63, while Brent crude for July gained 39 cents to $62.45 in afternoon trade.

Gold fetched $1,187.32 compared with $1,184.80 late Wednesday.

In other markets:

— Mumbai fell 0.21 percent, or 57.95 points, to end at 27,506.71 points.

Drug maker Cipla fell 2.58 percent to 643.40 rupees, while miner Vedanta Limited rose 2.53 percent to 196.90 rupees.

— Malaysia’s index ended up 0.3 percent, or 5.1 points, to close 1755.56.

IOI Corp. closed up 1.50 percent to 4.050 ringgit, while Petronas Dagangan rose 0.160 percent to 20.000 ringgit.

— Bangkok closed down 0.48 percent, or 7.23 points, to 1,493.61.

Oil company PTT fell 1.41 percent to 350 baht, while Siam City Cement dropped 2.23 percent to 395 baht.

— Jakarta ended down 0.30 percent, or 15.99 points, at 5,237.40.

Food manufacturer Indofood Sukses Makmur gained 1.39 percent to 7,300 rupiah, while property developer Summarecon Agung slipped 2.78 percent to 1,920 rupiah

— Singapore fell 0.21 percent, or 7.17 points, to 3,417.77.

United Overseas Bank fell 0.09 percent to Sg$23.63 while real estate developer Capitaland declined 1.12 percent to Sg$3.52.

— Taipei added 0.20 percent, or 19.30 points, to 9,712.84.

Taiwan Semiconductor Manufacturing Co. gained 1.38 percent to Tw$147.0 while Hon Hai Precision Industry was 0.92 percent higher at Tw$98.3.

— Wellington rose 0.34 percent, or 19.70 points, to 5,777.64.

Fletcher Building was up 0.70 percent at NZ$8.66 and Mainfreight was steady at NZ$15.95.

— Manila shed 1.23 percent, or 93.67 points, to end at 7,505.03.

GT Capital Holdings eased 0.57 percent to 1,392 pesos, BDO Unibank fell 4.84 percent to 106.20 pesos and Universal Robina dropped 1.11 percent to 187.80 pesos.–Bloomberg News contributed to this story