June 9, 2017 10:45 am JST

UK election impact on Asian markets limited

Nikkei, Kospi make small gains in morning trading

KENTARO IWAMOTO, Nikkei staff writer

TOKYO -- Exit polls from the U.K. general election show Prime Minister Theresa May's Conservative Party could fall short of an overall majority, but this appears to have had little impact on Asian markets on Friday.

Japan's Nikkei stock average started at 19,953 yen, or 0.22% higher than Thursday's closing price. South Korea's Kospi rose 0.32% to 2371.22 at the beginning of morning trading.

A BBC exit poll released as polls closed suggested the Conservatives would fall 12 seats short of an overall majority -- a result that would throw Brexit negotiations into confusion. Sterling fell to around 140 yen per pound -- a drop of almost two yen.

"The impact on the yen's rate against the dollar is limited. So the impact on Japanese stocks has been small," Yoshinori Ogawa, a senior strategist at Okasan Securities, told the Nikkei Quick News.

Hiroshi Yanagisawa, a chief analyst at FX Prime by GMO, pointed out that the Labor Party's resurgence had been widely reported in the buildup to the vote and that the pound has not been sold as aggressively as it was after last June's referendum. "Even if the Conservative Party actually falls short of an overall majority as the exit polls show, it will not likely be an issue in the foreign exchange market."

As of 9:30 a.m. Tokyo time, the dollar was trading at around 109.96 yen and 1122.55 Korean won. The Australian dollar was trading at around 0.752 to the dollar.

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