Asian Market Update – Friday: Bitcoin falls back after insane rally; Asian stocks rally on better Japanese GDP data

Bitcoin euphoria

Bitcoin market in a state of euphoria

Bitcoin prices climbed up in another rally in Asian trading Friday morning, bellowing away $16,000 and $17,000 to reach a high of $17,627 before falling back.

The price action today came after an insane rally in the price of bitcoin overnight, Hong Kong time, with the price nearing $20,000 on Coinbase.

The extremely active trading even brought down Coinbase-owned GDAX exchange, though normal operations were restored after about half an hour, as reported by CCN.

As of midday in Asian trading on Friday, bitcoin was down 5.12 percent to $16,501.

With the historic run in bitcoin, the debate about its future is also heating up. On one side are the people who are drawn into the cryptocurrency because they believe bitcoin is better store of value than precious metals; On the other side, people are arguing that nothing can justify its current price increase.

Ethereum continued down slightly on Friday morning, though it later shrugged off some of the losses from early morning. At midday, ethereum was down 1.19 percent to $428. The coin had lost about $16 in a downfall from 5 AM to reach $423 at 8 AM before surging back.

The story is similar for litecoin, which was trading down 1.08 percent to $97 at midday. Litecoin has been struggling to gain momentum since it topped out on December 3.

Main Market Movers – Mid-day Asian Trading Session

Indexes Value at Midday Daily Change
Japan- Nikkei 225 22,772 1.22%
China-Shanghai Composite Index 3,269 -0.09%
Hong Kong –Hang Seng 28,465 0.54%
South Korea-KOSPI 2,468 0.28%
Australia-ASX 200 5,995 0.29%
S&P 500 E-Mini Futures 2,641 -0.03%

Major Asian equities markets rallied on Friday morning session, extending gains seen on Thursday, though the market on the Chinese mainland was still down slightly.

In Tokyo, the Nikkei 225 Index edged up 1.22 percent to 22,772 before midday on Friday, after trading up by 1.45 percent yesterday as well. A better-than-expected economic growth rate out on Friday might have boosted investors’ confidence, adding to BOJ’s voices that ultra-easy monetary policies and stimulus packs would be intact in the near future. Japan’s GDP grew 2.5 percent in the third quarter from the year before.

In Hong Kong, the Hang Seng Index edged up 0.54 percent to 28,465 at midday, turning a recent downward trend.

Down under, the ASX 200 tacked on 0.29 percent to 5,995 at midday.

In South Korea, the Kospi also gained 0.28 percent to 2,468 at midday.

On the Chinese mainland, the Shanghai Composite Index was off 0.09 percent to 3,269.

The S&P 500 E-Mini Futures was down 0.03 percent to 2,641.

Investors are currently waiting for November trade data for China, which is expected later today. In October, China’s export growth pace slowed to 6.9 percent, but imports accelerated to 17.2 percent. China posted a trade surplus of $38.17 billion in the month. Investors will be paying attention to the demand for commodities from the world’s second largest economy in November.

In the US, in a last-minute effort, US Democratic and Republican lawmakers saved the US government from a shutdown this weekend by passing a short-term spending bill. But, the bill only covers the time before December 23, when a yearly spending bill needs to be finished.

Currencies

The Japanese yen lost 0.22 percent against the US dollar at midday Friday, changing hands at 113.32 per dollar.

The Chinese yuan lost 0.03 percent against the US dollar at 6.6190 per dollar.

The Australian dollar lost 0.01 percent on the dollar, changing hands at 1.3208 per dollar at midday.

Commodities

WTI Oil was up 0.02 percent to $56.61 per barrel.

Brent Crude gained 0.18 percent to $61.15 per barrel.

Gold was up 0.17 percent to $1,249 an ounce.

News across Asia

In Japan, the world’s third-largest economy saw solid growth in the third quarter of the year, fresh data out on Friday showed. The Japanese economy grew 2.5 percent, beating a Reuters poll that estimated 1.5 percent growth. The better-than-expected growth was largely buoyed by a 1.1 percent rise of capital expenditure in the GDP.

Take away: The economy grew fast, and the BOJ appears to be inclined to keep current ultra-easy monetary policies and massive financial stimulus, despite missing their inflation rate goals. The long-term effects of this on the Japanese economy are undoubtedly questionable.

In China, officials voiced strong dissatisfaction over the EU’s new anti-dumping legal framework that only requires companies and industry groups to prove “significant market distortion” when filing anti-dumping cases.

Take away: China is worried because it makes it easier for European companies to keep Chinese goods out of their market by pointing to “market distortion.” There is a widespread consensus that distortion occurs in China at least in some industries. Immediate escalation of trade tensions between the EU and China is unlikely, but this is a core issue for China and the Chinese commerce ministry said it would firmly defend against any potential “abuse” of WTO rules.

Featured image from Pixabay.

Disclaimer: The author owns bitcoin, ethereum and litecoin. He holds investment positions in the coins, but does not engage in short-term trading.

Author:
Fredrik Vold is an entrepreneur, financial writer, and technical analysis enthusiast. He has been working and traveling in Asia for several years, and is currently based out of Beijing, China. He closely follows stocks, forex and cryptocurrencies, and is always looking for the next great alternative investment opportunity.