A bank employee counts U.S. dollar notes at a Kasikornbank - REUTERS/Athit Perawongmetha
Hong Kong - 1 June 2017: Tokyo led broad gains across Asian markets Thursday, boosted by a weaker yen and upbeat economic news, while the pound extended losses on growing uncertainty about the outcome of next week's British election.
The advances came as investors brushed off losses on Wall Street that followed an uninspiring report on the economy from the Federal Reserve.
Tokyo ended 1.1 percent higher as dealers welcomed a survey showing Japanese firms boosted their capital spending in the first quarter, a sign they are growing more confident and suggesting the economy is picking up.
The figures came a day after separate numbers showed factory output in April climbed at its fastest pace in six years.
"There are good stories and bad stories out there for investors, but the market is largely welcoming the upbeat business investment data," Toshihiko Matsuno, chief strategist at SMBC Friend Securities, told AFP.
Most other regional markets tracked the Nikkei. Hong Kong added 0.6 percent and Sydney put on 0.2 percent, Singapore was 0.5 percent up. Wellington, Taipei, Manila and Bangkok were also comfortably higher.
However, Shanghai shed 0.5 percent following the release of the private Caixin purchasing managers index of manufacturing, which showed activity contracted in May for the first time in 11 months. The result disappointed dealers, a day after an official reading pointed to a continued increase, beating forecasts.
"China's manufacturing sector has come under greater pressure in May and the economy is clearly on a downward trajectory," Caixin analyst Zhengsheng Zhong said in a joint statement with data compiler IHS Markit.
Seoul lost 0.1 percent, while Mumbai was down 0.2 percent a day after data showed the Indian economy slowed in the past financial year during which the government made the shock move to ban most of the currency in circulation.
Asia was given a negative lead from New York after the Fed said in its "beige book" that while sentiment among US firms was broadly upbeat, there were worries in some regions about trade and other government policies.
However, it did not provide any suggestion that the central bank would hold off lifting interest rates as expected later this month, providing support to the dollar. Eyes are on the release Friday of US jobs data, which will provide a better handle on the Fed's rate plans.
The pound stumbled after a fresh opinion poll pointed to a hung parliament at next Thursday's British general election.
Sterling had risen in recent weeks on the prospect that Prime Minister Theresa May would win a landslide, giving her a stronger hand in Brexit talks. But the currency has fallen with the government's poll numbers on fears Britain could end up with a bad exit deal.
The yuan hit its highest levels in seven months Thursday leading to talk Beijing was propping up the beleaguered unit following last week's credit rating downgrade by Moody's.
Since the downgraded China on May 24 -- which cited slowing growth and ballooning debt -- the yuan has strengthened sharply and was trading Thursday at around 6.7800 per US dollar, a level not seen since early November. Its offshore rate, which is less controlled by Beijing, was 6.7330, its strongest since mid-October.
China said last week it was considering changing its mechanism for guiding the yuan's value, which was interpreted as a sign Beijing would tighten its grip despite pledges to allow market forces to play a larger role.
In early European trade London rose 0.4 percent, Paris added 0.3 percent and Frankfurt was 0.2 percent higher.
Tokyo - Nikkei 225: UP 1.1 percent at 19,860.03 (close)
Hong Kong - Hang Seng: UP 0.6 percent at 25,809.22 (close)
Shanghai - Composite: DOWN 0.5 percent at 3,102.62 (close)
London - FTSE 100: UP 0.4 percent at 7,550.55
Euro/dollar: DOWN at $1.1234 from $1.1241 at 2100 GMT
Dollar/yen: UP at 111.02 yen from 110.75 yen
Pound/dollar: DOWN at $1.2853 from $1.2892
Oil - West Texas Intermediate: UP 46 cents at $48.78 per barrel
Oil - Brent North Sea: UP 44 cents at $51.20
New York - Dow: DOWN 0.1 percent at 21,008.65 (close)