SINGAPORE, Sept 24 - Asian share markets gave up sharp gains on Wednesday as buying of techs and defensive stocks gave way to selling of dollar-earning exporters, but concern over possible Bank of Japan intervention kept the strong yen in check. Having slipped to a low of 110.91 yen on Tuesday, a holiday in Japan, the dollar was trading around 112.10 yen at 0227 GMT. Against the euro the yen was worth 128.35, while the euro bought 1.1449 dollars. Sankyo Co Ltd <4501.T> and other Japanese drug makers soared on the final day to gain rights to their half-year dividends, while oil issues, such as Nippon Oil Corp <5001.T>, rose on the firm yen. "Investors are putting money into defensive issues to get their dividends and are also covering shorts in the electronics and drug sectors following Monday's massive fall," said Hiroaki Kuramochi, head of global equities at Credit Lyonnais.
Japan's Nikkei average <.N225> was up 0.04 percent to end the morning at 10,479.35 after having gained more than 1.7 percent earlier. MSCI's dollar-based index of Asian stock markets outside of Japan <.MSCIAPJ> edged up 0.21 percent. U.S. stocks rose on Tuesday, as investors nibbled at technology stocks, pushing the Dow Jones industrial average <.DJI> 0.43 percent higher to 9,576.04, the broader Standard & Poor's 500 Index <.SPX> up 0.61 percent, and the tech-heavy Nasdaq Composite Index <.IXIC> 1.45 percent higher. Australian stocks rose on the U.S. gains that gave News Corp a strong start, but were capped by worries about the local currency strength.
The S&P/ASX 200 index <.AXJO> added 0.66 percent to 3,201.7, with News Corp up 1.93 percent on talk that Rupert Murdoch's son, Lachlan, was soon to be made chief executive of British pay-TV company BSkyB , 34 percent owned by News. The Australian dollar eased to below 67.5 U.S. cents, extending its pullback from Monday's near five-year high at 68.36. Hong Kong stocks headed back above the key 11,000 point level, helped by the U.S. gains and growing evidence of an economic rebound at home. The blue-chip Hang Seng Index <.HSI> opened 0.84 percent higher at 11,036.30 points, with most blue-chips trading higher.
TANIGAKI IN FOCUS
Following a weekend G7 call for flexible currency policy, the market was trying to work out whether Japanese authorities would change their stance on currency intervention after the appointment of a new finance minister, Sadakazu Tanigaki. Tanigaki is due to give interviews to news organisations on Wednesday, embargoed until around 1035 GMT. So far, he has said that policy would not change and other officials have stressed that Japan would continue to intervene in the market as it saw fit. "The situation is similar to 1999," said Junya Tanase, a forex strategist at JP Morgan Chase. In 1999 when Japanese stocks were rising, foreign investors bought a net 11 trillion yen of Japanese stocks, pushing up the yen. In the same year, Japan spent 7.6 trillion yen in yen-selling intervention to curb the currency's rise to support Japanese exporters, the main force behind economic growth. "But Japan suddenly changed its game and slowed down intervention, letting the yen go as high as 101 yen at that time, and the situation is very similar now," Tanase said.
TECH GAINS
South Korean shares followed the Nikkei's lead, starting higher and shedding those gains by midday with the Korea Composite Stock Price Index<.KS11> rising 0.12 percent to 719.69. Samsung Electronics Co Ltd <05930.KS> and other technology shares that were the hardest hit by the currency turmoil early this week regained their ground after strong gains in techs in the U.S., with the sector's sub-index <.KS41> up 1.02 percent. Taiwan techs led the broader TAIEX <.TWII> 0.27 percent higher, while electronics in Singapore drove the Straits Times index <.STI> to a 0.57 percent rise. NYMEX crude oil futures inched up ahead of Wednesday's OPEC meeting in Vienna, which is seen keeping output limits unchanged, and weekly inventory data forecast to show a crude stock build. New prompt-month NYMEX November crude rose seven cents to 27.20, before later easing to $27.10, after settling in New York at $27.13 a barrel. Gold fell on profit-taking. Spot gold was trading at $384.00, down from New York's last trade of $385.40.//