ASIA MARKETS: Asia Stocks Stick To Tight Range, But Japan Dives

By Sarah Turner, MarketWatch

SYDNEY (MarketWatch) -- Most major Asia stock markets stuck close to the flat-line Friday, but Japan was an exception, falling sharply as the yen gained strength ahead of a meeting of top finance ministers.

South Korea's Kospi and Australia's S&P/ASX 200 index each traded fractionally higher, while Hong Kong's Hang Seng Index slipped 0.1%, and mainland Chinese markets remained closed for a holiday.

But the most prominent mover in the region -- Japan's Nikkei Stock Average -- dropped 2%.

"Japan continues to grab headlines in Asia with plenty of yen positioning ahead of the [Group of 20] meetings. The Nikkei [Average] has lost ground as the yen appreciates, heading into the meeting," said IG Markets strategist Stan Shamu.

Delegates from the overlapping Group of 20 and Group of Seven blocs of major economies were due to meet later Friday in Moscow, and may make some references to Japan's recently aggressive measures to weaken its currency.

Those actions have included strong rhetoric on the yen's level and the setting of a formal 2% inflation target, as well as a commitment to open-ended asset purchases from next year.

Earlier in the week, a joint G-7 statement sparked a bought of volatility in the yen, and the "markets remain alert to G-7/G-20 headlines," according to currency strategists at BNP Paribas.

On Friday, the dollar (USDJPY) slipped to Yen92.44, down from Yen92.85 late Thursday after spending much of the week above Yen93.

A stronger yen tends to depress investor appetite for Japanese companies that make a significant portion of their profit overseas.

Currency-sensitive auto stocks were among the worst performers Friday in Tokyo, with Mazda Motor Corp. (>> Mazda Motor Corporation) down 5.9%, and Subaru maker Fuji Heavy Industries Ltd. (>> Fuji Heavy Industries Ltd.) losing 4.5%.

Technology exporters' losses included a 2% drop for Casio Computer Co. (>> Casio Computer Co Ltd) and a 3.4% loss for Panasonic Corp. (>> Panasonic Corporation)

Shares of Sony Corp. (>> SONY CORPORATION) fell 4.6%. U.S. videogame-console and software sales dropped in January, according to NPD Group, and Sony is widely expected to unveil its new gaming console at an event Feb. 20.

Earnings sway Tokyo, Sydney

In the Japanese metals sector, Nippon Steel & Sumitomo Metal Corp. declined 4.3% after it posted a quarterly profit but released a weaker-than-expected earnings forecast for its fiscal year on Thursday.

Other steel firms likewise dropped, with Kobe Steel Ltd. losing 5.5%, and Sumitomo Metal Mining Co. (>> Sumitomo Metal Mining Co., Ltd.) down 4.6%.

Kirin Holdings Co. (>> Kirin Holdings Company, Limited.) fell 5% after the Japanese brewer posted a sharp gain in full-year profit but said 2013 pretax profit will likely fall 5% on sales promotion costs, according to a Nikkei news report.

 
   Also trading lower after posting earnings, Trend Micro Inc.   (>> Trend Micro Incorporated (ADR)) lost 7.8%. 
 

In Australia, banking group Australia & New Zealand Banking Group Ltd. (>> Australia and New Zealand Banking Group) declined 0.6% after the lender reported a 20% drop in first-quarter net profit amid soft economic conditions.

Miners were the worst performers by sector, with Rio Tinto Ltd. (>> Rio Tinto plc) weighing on the market as it traded 2.1% lower after posting its first fiscal-year loss late Thursday.

Rival BHP Billiton Ltd. (>> BHP Billiton Limited) fell 0.4%, while gold major Newcrest Mining Ltd. (>> Newcrest Mining Limited) declined 0.9%.

Offsetting those losses, supermarket operator Wesfarmers Ltd. climbed 1.5%, and Westpac Banking Corp. (>> Westpac Banking Corporation) rose 1.7%.

South Korean trading saw steel giant Posco (>> POSCO) advance 0.4%, while electronics major Samsung Electronics Inc. (>> Samsung Electronics Co., Ltd.) edged up 0.3%.

In Hong Kong, globally exposed ports operator Cosco Pacific Ltd. (>> COSCO PAC ADR) fell 1.1%, while Europe-exposed apparel firm Esprit Holdings Ltd. (>> Esprit Holdings Limited) fell 0.6%.

Banking giant HSBC Holdings PLC (>> HSBC Holdings plc), which is based in London and has significant operations across Europe, fell 0.5%.

While U.S. jobless claims surprised positively, international economic news remained bleak on Thursday, with data showing gross domestic product in the 17-nation euro zone contracted by 0.6% during the fourth quarter.

That combination led to a lackluster performance on Wall Street Thursday, where stocks held in a tight range.

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