By Wei-Zhe Tan
Of DOW JONES NEWSWIRES
SINGAPORE (Dow Jones)--Asian stock markets were mixed Tuesday in cautious, holiday-thinned trade as investors fretted over Spain's recession and stuttering U.S. economic growth, with renewed strength in the Japanese yen hurting Tokyo equities, but shares in Sydney drew some support from China's improved manufacturing indicator.
Japan's Nikkei Stock Average was 1.2% lower, Australia's S&P/ASX 200 rose 0.7% to 4427.9, Indonesian shares were flat and New Zealand's NZX-50 gained 0.4%.
Trading volumes dwindled in Asia as markets in China, Hong Kong, Malaysia, the Philippines, Singapore, South Korea, Taiwan, Thailand, Vietnam and India were shut for holidays.
Dow Jones Industrial Average futures were up 18 points in screen trade.
Monday in New York, the U.S. dollar slid below the key Y80 level for the first time since February 24 as investors retreated to the safe-haven currency after Spain's economy shrank for a second straight quarter, while the U.S. reported weak economic data.
"The rise of the yen comes as a shock, particularly in light of last week's Bank of Japan easing," said Nicholas Smith, equity strategist at CLSA; "although none of this is attributable to Japan, the BOJ is in an increasingly difficult position to do anything about it."
The greenback was recently at Y79.83 against the Japanese yen from Y79.82 late Monday in New York. The euro was at $1.3242 against the U.S. dollar from $1.3239, and at Y105.73 versus the yen from Y105.69.
Exporters in Tokyo were hit by the stronger yen with Sony down 3.3% and Toyota Motor off 2.1%.
Below-view outlooks for some firms amid uncertainty over the health of the global economy also added to the broader market's weakness, with Nippon Electric Glass dropping 8.0% and Sharp losing 8.9%.
The Australian market outperformed regional bourses though, with the benchmark S&P/ASX 200 index hitting a fresh nine-month high at 4432.2, cheered by a slightly stronger April official purchasing managers index reading for China.
The PMI index came in at 53.3, higher than March's 53.1 print but below the 53.5 forecast.
Mining stocks gained on the PMI news with BHP Billiton up 1.4% and Newcrest Mining 1.0% higher as the world's second largest economy is a major importer of raw materials.
Woodside Petroleum jumped 4.3% after it sold a stake in its proposed Browse liquefied natural gas project in Western Australia state to a Japanese consortium for US$2 billion.
Investors were also looking to the upcoming Reserve Bank of Australia rate decision for further trading cues.
"China's PMI data has buoyed the market, along with imminent expectations of a rate cut," said Pengana Capital portfolio manager Tim Schroeders.
"You can never rule out a 50-basis-point rate cut, but the RBA probably reserves the right to see what the budget brings next week. I think generally people are happy to bolster the income part of their portfolios and reward the high yield payers," Schroeders said.
The yield on 10-year Japanese government bonds earlier fell to 0.880%, its lowest level since October 2010 as investors returning from a holiday Monday reacted to weaker-than-expected U.S. growth numbers out Friday and also on a stronger yen.
Lead June futures were down 0.01 at 143.11, while the 10-year yield was flat at 0.885%.
Spot gold was at $1,665.70 per troy ounce, up $1.40 from its New York settlement on Monday. June Nymex crude oil futures were 11 cents lower at $104.76 per barrel on Globex.
-Wei-Zhe Tan, Dow Jones Newswires; +65-6415-4142; wei-zhe.tan@dowjones.com
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