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Japan underperforms after mixed bag of economic data

Asian bourses largely rose amid thin post-Christmas trading, as markets in Australia, Hong Kong, Indonesia and the Philippines remain shut. With Wall Street closed for the holiday season as well, attention was on a flurry of monthly indicators released by Japan ahead of trade opening.

For the month of November, Japan’s industrial output posted a surprise drop, while inflation continued to slow, offering fresh signs that efforts to resuscitate the country’s stalled economy aren’t proceeding smoothly.

Manufacturing fell 0.6 percent on-month in November, compared with a Reuters poll forecasting a 0.8 percent rise and October’s 0.4 percent rise. Meanwhile, core inflation, which includes energy but not fresh food, rose 2.7 percent on-year in November, in line with expectations from a Reuters poll, but marked the fourth straight month of declines.

Once the effects of an April sales tax hike are stripped out, core inflation was 0.7 percent in the month, slowing from October’s 0.9 percent and well below the 2 percent inflation target set by the Bank of Japan (BOJ).

Nikkei slips 0.2 percent

On the final trading day of the week, Japanese shares were lackluster following the release of a mixed bag of economic data. The benchmark Nikkei 225 index extended Thursday’s losses to inch down 0.2 percent, as the yen dropped modestly against the greenback to trade at 120.21. Meanwhile, the broader Topix was little moved.

Exporters languished as a stronger currency weighed. Canon was the biggest loser, plunging more than 3 percent while Honda and Nikon slumped 1.5 and 0.6 percent each.

Large-caps traded mixed; Fast Retailing, owner of clothes brand Uniqlo, lost 0.7 percent and Softbank crept up 0.2 percent.

Sumitomo Mitsui Financial Group halved gains to 0.6 percent by 0925 SIN/HK, after one of its units, Sumitomo Mitsui Banking (SMBC), announced that it would be buying Citigroup’s Japanese retail banking business for about 40 billion yen ($ 333 million) on Thursday.

Kospi adds 0.3 percent

South Korea’s Kospi index edged up after being shut on Thursday for the Christmas holiday, while the junior Kosdaq index added 0.3 percent.

Energy plays traded higher, as oil prices moved up in early Asian trade after news that a rocket hit a storage tank at Libya’s biggest oil port. S-oil advanced nearly 1 percent while SK Innovation notched up 0.1 percent.

Rest of Asia

China’s Shanghai Composite index opened modestly above the flatline while Taiwanese shares elevated 0.2 percent. Singapore’s Straits Times index eased 0.2 percent early Friday.

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