| Updated at: 1508 PST, Friday, May 13, 2011|
HONG KONG: Asian shares were mixed Friday after China tightened monetary policy further in its battle to tame inflation, stoking regional concerns of a slowdown in the world's number two economy.
Beijing late Thursday said it would raise the amount of money banks must hold in reserve for the fifth time this year, effectively limiting the amount they can lend. The move is the latest by China as it struggles with rising prices.
It came a day after data showed inflation at 5.3 percent in April, slightly off March's 5.4 percent -- which was a 32-month high -- but still well above the government's four percent target.
Tokyo ended the day 0.70 percent, or 67.88 points, lower at 9,648.77 and Seoul closed 0.12 down percent, of 2.57 points, at 2,120.08. But Sydney gained 0.33 percent, or 15.3 points, to 4,711.4. Hong Kong closed up 0.88 percent, or 202.51 points, at 23,276.27, while Shanghai added 0.95 percent, or 26.95 points, to 2,871.03, with analysts saying the reserve requirement hike had been widely expected.
The rise in the reserve requirement ratio follows four interest rate hikes by Beijing since October and raises concerns in other regional countries, which rely heavily on China's blistering growth to help propel their own economies.
In Tokyo banks were hit after the government suggested they may have to waiver some pre-quake loan terms for Tokyo Electric Power before the operator of the stricken Fukushima nuclear plant can get public money to help pay for compensation claims.
And Seoul edged down after the central Bank of Korea said it would keep interest rates on hold at three percent despite growing inflationary pressures.
Analysts said the bank may have been swayed by growing economic uncertainty at home and overseas, including the ongoing debt crisis in the eurozone. Asian investors were given a good cue from Wall Street, where shares rose in line with a recovery in commodity prices.
The Dow rose 0.52 percent, the S&P 500 0.49 percent and the tech-heavy Nasdaq added 0.63 percent. Global markets have suffered heavy losses recently as big falls in the price of commodities such as oil stoked fears that less demand means the global recovery is weaker than thought.
On oil markets, crude eased after posting gains on Thursday in New York. New York's main contract, light sweet crude for delivery in June, lost 28 cents to $98.69 a barrel in afternoon trade, while Brent North Sea crude for June delivery was down 10 cents to $112.88.
Despite their falls, both contracts are well up on last Friday's prices, when WTI hit a multi-month low at $94.63, while Brent was as $105.15. (AFP)