ASIA MARKETS: Asia Stocks Struggle But Japan Rises

By Sarah Turner, MarketWatch

SYDNEY (MarketWatch) -- Most major Asia stock markets seesawed in Monday trading, though Japanese equities outperformed to hit a seven-month high as the yen weakened further against major rivals.

Japan's Nikkei Stock Average climbed 0.8% to a level not seen since late April as investors returned from a three-day weekend.

Australia's S&P/ASX 200 index advanced 0.2%, while South Korea's Kospi edged down 0.3%.

Chinese trading started the week on a muted note, with Hong Kong's Hang Seng Index down 0.1%, and the Shanghai Composite index lower by 0.3%.

"Traders have some doubts about the significance of the strong rally in U.S. markets on Friday. ... Turnover in U.S. markets on Friday was low in a holiday-affected session," said Ric Spooner, chief market analyst at CMC Markets.

"In these circumstances, many traders prefer a cautious stance, waiting to see if the market can hold these gains once trading returns to normal this week," Spooner said.

U.S. stocks had ended with strong gains in holiday-thinned trading Friday, as the S&P 500 (SPX) added 1.3%, with the moves sealing a strong weekly performance on Wall Street.

Signs that U.S. retail sales could gather momentum going into the holiday season and optimism that the global economic backdrop was improving buoyed the U.S. markets at the week's end.

Japanese stock gains followed a 3.8% advance for the Nikkei Stock Average over the four trading days last week, as the yen continued to weaken. The dollar advanced 1.3% against the yen last week, with gains made so far in November at 3.3%.

On Monday, minutes of the Japanese central bank's Oct. 30 policy meeting were released just ahead of the stock-market open, underlining the Bank of Japan's plan to "undertake further aggressive monetary easing" as it announced an expansion to its asset-buying program.

The central bank stood pat at a subsequent meeting last week -- minutes for which have yet to be released -- though it hinted at more easing to come.

Japan's major exporters got a boost as the euro broke above the 107-yen level early Monday to hit a seven-month high against the Japanese currency before later falling back to  ¥106.59.

The dollar traded at  ¥82.29, just down from  ¥82.35 reached on Friday, and also giving up early strength.

Japanese exporters managed to retain their gains, with euro-exposed names among the leading advancers. Canon Inc. (CAJ) rose 1.6%, Mazda Motor Corp. (7261.TO) advanced 1.5%, and Pioneer Corp. (6773.TO) jumped 4.1%.

Tokyo-listed car makers gained as well, with Toyota Motor Corp. (TM) up 2.4%, Honda Motor Co. (HMC) gaining 1.6%, and Nissan Motor Co. (NSANY) ahead by 2.5%.

On the deal front, a report Monday in the Nikkei business daily said the three top shareholders in struggling microchip maker Renesas Electronics Corp. (RNECY) were set to buy the firm out as previously tipped, sending Renesas shares jumping 12.8%.

Hitachi Ltd. (HIT) and NEC Corp. (NIPNF), both among the reported buyers of Renesas, saw their shares rise 1.1% and 0.7%, respectively. The third buyer, Mitsubishi Electric Corp. (MIELF), rallied 3.1%.

In Australia, Qantas Airways Ltd. (QUBSF) climbed 1.6% after an Australian Financial Review report over the weekend said that a group of former executives and investors had bought a stake in the firm.

Gains for energy and material firms offered broad support for the Australian market, with Beach Energy Ltd. (BCHEY) up 1.6%, and gold extractor Newcrest Mining Ltd. (NCMGF)(NCMGF) advancing 1%.

In Hong Kong, investors weren't so keen on energy firms, however, with losses for China Petroleum & Chemical Corp. (SNP) down 1.6%, and China Shenhua Energy Co. (CSUAY) lower by 1.3%, working to weigh on the market.

Away from energy, apparel firm Esprit Holdings Ltd. (ESHDF) lost 3.1%, while airline Cathay Pacific Airways Ltd. (CPCAY) fell 2%. Late Friday, the Hong Kong-listed carrier said that competition has pushed average economy-class ticket prices 4% lower compared to the previous year, while premium traffic suffered amid challenging global economic conditions.

Airlines listed on the Chinese mainland also weakened Monday, with Air China Ltd. (AIRYY) down 0.9% and China Eastern Airlines Corp. (CEA) falling 1% in Shanghai.

Losses for Samsung Electronics Inc. (SSNLF) weighed in Seoul, with the heavily weighted electronics major trading down 1.3%.

Arch-rival Apple Inc. (AAPL) reportedly filed Friday to add six more Samsung products to its patent infringement lawsuit against the Korean firm.

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