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Asian share markets endured mixed fortunes on Thursday in the wake of disappointing data on Chinese manufacturing, while investors showed renewed appetite for commodities as the new year got underway.
Gold grabbed the limelight with a 1.5% jump to $1,223.46 an ounce, recouping just a little of the losses that made last year its worst in three decades.
The buying spilled over into silver and copper, with dealers talking of Chinese demand for commodities in general.
The other action was in the yen, which resumed its long decline as investors used it to fund purchases of higher-yielding assets abroad.
The drop in the yen has been viewed as positive for Japanese exports and corporate earnings, and a major reason its share markets outperformed all others last year.
Japan's Nikkei was closed on Thursday but ended 2013 with an annual gain of 57%. Many analysts look for a further advance this year as the Bank of Japan remains committed to its massive stimulus campaign.
Nomura's global strategy team is forecasting that Japanese equities will provide the greatest return of all global stocks in 2014, thanks in large part to rising corporate earnings.
They see the Nikkei at 18,000 points by the end of this year, up from the current 16,291, and said even 25,000 was possible by 2018 should Prime Minister Shinzo Abe's aggressive economic program prove successful in defeating deflation.
Asian markets outside of Japan had a much more mixed performance in 2013, partly because investors rediscovered the attractions of assets in Europe and the United States.
Having ended last year essentially flat, MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.5% on Thursday.
The relentless drop in the yen has also been eroding the competitiveness of Japan's Asian neighbours, one reason Korean shares skidded 1.5% on Thursday.
Not helping was a drop in China's official Purchasing Managers' Index (PMI) to 51.0 in December, from 51.4 the previous month and below forecasts for 51.2.
Analysts at Barclays noted the pullback in activity in the survey was broad-based across industry sectors and sizes.
"We think elevated interest rates across the money, bond and credit markets have led to higher funding costs, hurt corporate sentiment and thus weigh on economic growth," they wrote in a client note.
Other data showed Singapore's economy contracted more than expected in the fourth quarter, but better news came from South Korea, where manufacturing activity picked up to its strongest level in seven months.
A slew of manufacturing indices for Europe and the United States are due out across Thursday which will offer a better idea of how global industry was faring into the end of the year.
YEN HEADING LOWER
For the major currencies the main themes continued to be weakness in the yen and resilience in the euro.
The common currency was up at 144.90 yen, having clocked up gains of 26% over 2013 to reach a five-year peak of 145.67. The dollar was likewise firm at 105.27 yen having climbed 21% last year.
The euro was a shade softer on the dollar at $1.3763, but still not far from its recent two-year peak of $1.3892.
Dealers suspect the single currency has been supported by the repatriation of funds by European banks and a large and expanding current account surplus in the euro zone.
But there remains a general assumption that rising US Treasury yields will eventually lift the dollar up on the euro.
Yields on US 10-year paper are up at two-and-a-half year highs of 3.03%. Even shorter-dated rates have been rising as improving US economic data justifies the Federal Reserve's decision to start tapering its asset-buying stimulus.
Outgoing Fed Chairman Ben Bernanke is giving a speech on Friday and may offer more guidance on the outlook for tapering.
In oil markets, US crude futures were trading 22 cents higher on Thursday at $98.64 a barrel, while Brent added 20 cents to $111.00.
