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Strong US data lifts Asian markets



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Nikkei 225 Index

Last Updated at 20 Oct 2017, 06:45 GMT *Chart shows local time Nikkei 225 one month chart
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Asian markets saw out Thursday's session on a positive note, with investors encouraged by a rebound on Wall Street.

US stocks rallied after the Commerce Department said new home sales jumped 18% in August, to the highest level since May 2008.

The data gave a lift to the US dollar in Asian trade.

In Japan, the Nikkei index ended the day up 1.28% at 16,374.14 points - the highest level in seven years.

Shares of Japanese consumer electronics firm Panasonic closed up 1.2%, after the Nikkei newspaper reported that Panasonic was in talks about taking a stake in Spanish auto parts maker Ficosa International.

If a deal materialises, it will be the first major acquisition by Panasonic's automotive business.

In Australia, shares in Goodman Fielder rose by 0.4%. The country's competition watchdog, the ACCC, said it would not oppose the acquisition of Goodman Fielder by Singapore-based Wilmar and Hong Kong firm First Pacific.

Both companies had jointly offered to pay $1.2bn (£0.73bn) for the struggling food firm. Goodman Fielder sells packaged edible oil under the Crisco and Gold'N Canola brands.

Australia's benchmark index, the S&P ASX 200, ended Thursday's session up 6.4 points at 5,382.2.

China markets

In China, the benchmark Shanghai Composite index ended up just 1.53 points at 2,345.10. There appeared to be muted reaction to various media reports that the Chinese government was looking into replacing central bank governor Zhou Xiaochuan, in a cabinet reshuffle during a major Communist party meeting scheduled to take place next month.

Reports have suggested there are internal battles among China's leaders about what kind of reforms are needed to overhaul the Chinese economy.

Currencies

The US dollar continued to benefit from the strong housing data, hovering close to a six-year high against the Japanese yen after breaking through the 109 yen level.

US Dollar v Japanese Yen

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But the New Zealand dollar fell to around a one-year low against the US dollar, following comments by the central bank governor there.

Graeme Wheeler from the Reserve Bank of New Zealand (RBNZ) said "the level of the exchange rate is unjustified and unsustainable, and that it is susceptible to a significant downward adjustment".

Mr Wheeler also said in a statement: "The real exchange rate has not adjusted materially to the recent downward movement in commodity prices.

"For example, global dairy prices have fallen by 45% since February 2014. Despite this, in August, New Zealand's real effective exchange rate was 1% higher than its February 2014 level."

The statement from the RBNZ sent the New Zealand dollar tumbling by half a US cent to $0.8026.

In terms of broader sentiment, investors will be looking to the US later, for further clues on the state of the world's biggest economy.

They will be eyeing the weekly US jobless claims data, as well as durable goods figures due for the month of August. Both sets of data will be released before the start of trading on Wall Street.