Asian markets mostly rise on optimism for trade, stimulus

Asian markets mostly rise on optimism for trade, stimulus

Monitoring Desk

HONG KONG: Most Asian markets rose Tuesday on the back of hopes for central bank and government stimulus measures around the world, while investors were also cheered by further signs of easing tensions in the China-US trade war.

Trading floors around the world have been tense for several weeks owing to concerns about a number of factors including the trade war, Brexit, a global economic slowdown and tensions in the Middle East.

However, while markets remain on edge, equities have enjoyed a positive start to the week, with Germany reportedly planning government support to avert a recession in Europe’s biggest economy and central banks elsewhere looking to ease monetary policy.

Among the key events this week is a speech by Federal Reserve boss Jerome Powell at the annual Jackson Hole symposium of central bankers in Wyoming.

His remarks will be pored over to see if he hints at another interest rate cut following last month’s move, and if so how deep it will be. However, some analysts have pointed out that while the US economy is showing signs of slowing, it remains healthy and Powell could decide no new help is needed just yet.

The Fed policy board “did not unanimously agree to the last 0.25 percent cut,” said Jeffrey Halley, senior market analyst for Asia-Pacific at OANDA. “US economic data continues to perform blissfully, implying the economy is doing just fine.

“Against that backdrop, I struggle to see why… Powell would hit the panic button at Jackson Hole this week. The financial markets could be setting themselves up for an ugly correction into the week’s end.”

Tokyo stocks open higher, tracking US rallies: Tokyo stocks opened higher on Tuesday, taking a positive lead from Wall Street where stocks rose for a third straight session.

The benchmark Nikkei 225 index was up 0.21 percent, or 42.19 points, at 20,605.35 in early trade, while the broader Topix index climbed 0.27 percent, or 4.07 points, to 1,498.40.

“Japanese shares will continue trying to recover as investors are welcoming continued rallies in the US and a halt to the yen’s gain,” Online Okasan Securities said in a note.

The Dow Jones Industrial Average jumped 1.0 percent Monday, joining a global rally amid talk of economic stimulus in Germany and China and expectation of further Federal Reserve interest rate cuts.

“US and European equities had a solid night boosted by confirmation the US commerce department will delay its ban on (Chinese telecoms giant) Huawei for another 90 days,” said Rodrigo Catril, senior FX strategist at National Australia Bank.

“Equity markets were also boosted by further speculation that the German government is preparing to ease fiscal policy with the news also fuelling a rise in core global bond yields,” added Catril.

Investors are closely watching US Federal Reserve Chairman Jerome Powell’s speech when he opens the central bank’s annual Jackson Hole symposium later this week.

The dollar fetched 106.60 yen in early Asian trade, against 106.66 yen in New York on Monday and 106.39 yen in Tokyo late Monday.

Toyota rose 0.42 percent to 6,902 yen in early trade with Honda up 0.28 percent at 2,479 yen. Panasonic gained 0.55 percent to 811.4 yen with Sony up 0.55 percent at 5,929 yen. (AFP/APP)

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