ASIA-PAC MID-SESSION UPDATE: Asia trade mostly higher with Nikkei surging after PM Abe's supermajority win

Asia equity markets begin the week mostly higher after last Friday’s fresh record levels in the S&P 500, DJIA and Nasdaq Comp, with Japan buoyant following the firm win by PM Abe’s ruling bloc at the snap election. ASX 200 (+0.1%) and Nikkei 225 (+1.0%) trade positive with the latter leading the region after the ruling coalition gained a supermajority at Sunday’s election, which keeps Abenomics firmly in place and paves the way for possible constitutional changes. Conversely, a mixed tone is observed in Chinese markets with the Shanghai Comp. (+0.1%) failing to significantly benefit from a firm liquidity operation by the PBoC, while the Hang Seng (-0.7%) underperforms on technical selling after hitting resistance around 28,500.

In FX markets, USD/JPY briefly broke above the 114.00 level as JPY weakened from the snap election results which strengthens PM Abe’s mandate and which keeps expansive policy firmly in place. USD also benefitted in early trade as USD/JPY briefly reclaimed 114.00 and USD/CNH tripped stops through prior resistance, although some of the moves were later pared as the greenback’s major counterparts nursed losses.

Finally, 10yr JGBs are flat with demand dampened amid the heightened risk appetite in Japan and an absence of a BoJ Rinban announcement.

23 Oct 2017 - 03:40- ForexImportant- Source: RANsquawk

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