Asia stocks muted, NZ dollar jumps on China 1-child change

TOKYO (AP) — Asian stock markets wavered Friday on renewed expectations for a Fed rate hike this year while the New Zealand dollar jumped on prospects of increased dairy exports after China abolished its one-child policy.

KEEPING SCORE: Japan's Nikkei 225 was up 0.8 percent to 19,083.10 after the Bank of Japan left its super-easy monetary policy unchanged. Hong Kong's Hang Seng was down 0.5 percent at 22,706.48 and South Korea's Kospi fell 0.2 percent to 2,029.47. China's Shanghai Composite was little changed at 3,387.73. Australia's S&P/ASX 200 fell 0.5 percent to 5,239.40. Stock benchmarks fell in Taiwan, Singapore the Philippines and Indonesia, but rose in Thailand.

BABY BOOST: The New Zealand dollar surged in the wake of China's announcement it would allow all couples to have two children, abolishing its unpopular one-child policy. New Zealand is a major dairy exporter and its milk powder and formula industry is likely to benefit from a baby boomlet in China. The kiwi dollar jumped to $0.6755 from $0.6699 the day before. Shares of baby-related stocks also posted big gains. Stroller maker Goodbaby International was up 5.1 percent in Hong Kong and Beingmate Baby & Child Food vaulted 10 percent in Shenzhen.

U.S. FACTORS: Investors increasingly believe the U.S. Federal Reserve will raise its benchmark interest rate from a record low in December. Data on Thursday showed the U.S. economy cooled during the third quarter but that was largely due to transitory changes in inventory levels and the underlying picture is in line with the Fed's view of a moderately strong economy. Super low interest rates have been a boon for stock markets for several years.

THE QUOTE: The third quarter growth figure "is unlikely to be an excuse for the Fed to hold off a rate hike," said Bernard Aw, market strategist at IG in Singapore said in a commentary. "As long as the jobs data resumes a strong upward trajectory, shrugging off the soft patch in August and September, alongside improvement in the inflation numbers, the case for a December liftoff remains alive."

WALL STREET: The Dow Jones industrial average fell 23.72 points, or 0.1 percent, to 17,755.80 on Thursday. The Standard & Poor's 500 dipped 0.94 point to 2,089.41. The Nasdaq composite sank 21.42 points, or 0.4 percent, to 5,074.27.

ENERGY: Benchmark U.S. crude was down 32 cents to $45.74 a barrel in electronic trading on the New York Mercantile Exchange. The contract added 12 cents to $46.06 a barrel in New York on Thursday. Brent crude, which is used to price international oils, lost 20 cents to $48.60 a barrel in London.

CURRENCIES: The dollar rose to 121.01 yen from 120.95 yen on Thursday. The euro was little changed at $1.0985 from $1.0990.

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Follow Yuri Kageyama: twitter.com/yurikageyama


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USD (per CHF) 1.01 0.00 0.06%