SYDNEY (Reuters) – Asian shares jumped on Monday, lifted by surprisingly strong manufacturing data from China, while the dollar shot up from a 15-year low against the yen, stirring speculation of Japanese intervention.
But the U.S. currency quickly gave up its gains, with traders saying the move was likely caused by a trading glitch rather than intervention. The Japanese Finance Ministry declined to comment on the incident.
The MSCI Asia share index outside Japan (.MIAPJ0000PUS) rose 1.6 percent, led by gains in Hong Kong and Shanghai, after data showed China's official purchasing managers' index (PMI) for manufacturing rose to a six-month high in October.
The PMI rose to 54.7 in October from 53.8 in September, higher than the median forecast of 52.9 in a Reuters poll of 12 economists and, in fact, higher than every individual forecast.
HSBC's China PMI also hit a six-month high last month.
But Japanese shares, Asia's worst performer this year, eased a touch as the yen's strength weighed on exporters.
The Nikkei average (.N225) was down 0.2 percent near a new seven-week low. Top Japanese brokerage Nomura was among the biggest losers (8604.T), with its shares slumping 3.6 percent after Friday's disappointing earnings.
For the year, Japan's underperformance is striking. The Nikkei is down 13 percent, compared to an 11 percent rise in the MSCI index.
Speculation about possible Japanese intervention kicked in after the dollar spiked as far as 81.60 yen on trading system EBS in a matter of seconds, from 80.40 before, and compared to a 15-year low of 80.21 hit in early trade.
But by mid-morning Asian trade, the yen had recovered to 80.67, within spitting distance of its post-war record low of 79.75.
"Judging from the price action, the market probably doesn't think right now there had been any intervention," said a trader at a major Japanese bank.
Currency investors have been on edge about possible intervention from Tokyo after it intervened to sell the yen in September for the first time in six years to pull the dollar from a 15-year low.
The U.S. dollar (.DXY), struggling to hold ground due to entrenched speculation the Federal Reserve could further ease policy when it meets this week by buying more U.S. government bonds, was down 0.3 percent against a basket of currencies.
The soft U.S. dollar was a boost to commodity prices. Oil rose toward $82 a barrel, gold hit a two-week high, spot silver jumped to 30-year peaks and palladium climbed to nine-year highs.
Some analysts said share and commodity prices could tear higher still if the Fed pledges to buy more bonds than the market expects, or if the Bank of England follows the Fed's lead by further loosening policy when it meets this week.
The market thinks the Fed would promise to buy at least $500 billion of Treasury debt over five months to support U.S. growth.
"Gold has perked up again," said Greg Gibbs, an RBS analyst in Sydney. "The gold bugs may also be eyeing the not negligible risk that the Bank of England follows the Fed."
(Additional reporting by Tokyo Markets team)
(Editing by Kazunori Takada)