Nikkei rises despite contraction in Japan's economy

Image source, AFP

Image caption, Japanese markets were unfazed by the weak growth data

Japanese shares finished higher despite new figures showing the country's economy contracting.

Japan's economy shrank by 0.4% between April and June compared with the first three months of the year.

But the country's benchmark Nikkei 225 rose 0.5%, closing at 20,620.26.

Last week's strong finish on Wall Street and a more stable yuan currency both helped to reassure investors and offset the impact of the weak economic data.

Over the past week, Asian markets had fretted over Beijing's surprise decision to allow the yuan to trade more freely, sending the Chinese currency on a downward spiral for several days.

Monday's trade saw Chinese shares rise, with the Shanghai Composite closing 0.7% higher at 3,993.67.

China central bank's chief economist Ma Jun has said that the yuan is likely to move in both directions as the economy stabilises.

Stronger yuan midpoint

The People's Bank of China (PBOC) fixed Monday's yuan midpoint at 6.3969 against the dollar, stronger than Friday's fix of 6.3975.

The currency is allowed to trade 2% below or above the midpoint set by the PBOC.

Hong Kong's benchmark Hang Seng index closed 0.7% down at 23,814.65, its lowest level in a month.

In Australia, shares were largely positive with the S&P/ASX 200 closing up 0.2% at 5,367.66.

Shares in mining company Newcrest jumped by 4% after Australia's largest gold miner reported a net profit of 546m Australian dollars ($403m; 拢257m) for the year to 30 June.

In South Korea, the benchmark Kospi index was in negative territory all day, finishing down 0.8% at 1,968.52.