Slowing virus, China stimulus hopes support stocks, yen nurses losses By Reuters


© Reuters. FILE PHOTO: A man wearing a mask walk at the Shanghai Stock Exchange building at the Pudong financial district in Shanghai

By Tom Westbrook

SINGAPORE (Reuters) – Asian stocks edged up on Thursday, supported by a fall in coronavirus cases and expectations of more Chinese stimulus to offset the economic impact of the epidemic, while the Japanese yen nursed heavy losses after suffering its steepest drop in six months.

The epicenter of the outbreak in China’s Hubei reported just 349 new cases on Thursday, the lowest since Jan. 25, although it was accompanied by a change in diagnosis rules.

China is widely expected to cut its benchmark lending rate on Thursday, adding to a slew of fiscal and monetary measures in recent weeks aimed at cushioning the virus’ impact on the economy.

China also plans to take over HNA Group and sell off its airline assets, Bloomberg reported on Wednesday, citing people familiar with the matter.

MSCI’s broadest index of Asia-Pacific shares outside Japan ticked up 0.1%.

Buoyed by the cheaper yen, Japan’s rallied 1.5%. Markets in Australia and New Zealand minted record highs.

“The lowering of interest rates, cutting of corporate tax rates, increasing money supply…these are all seen as very strong responses” from China, said Michael McCarthy, chief market strategist at CMC Markets in Sydney.

The prospect of central bank support and easier money also underpinned bonds, with U.S. Treasury yields steady, with benchmark 10-year yields last at 1.5815%.

Overnight pan-regional index in Europe rose 0.8% to a record high. The Jones, and Nasdaq all gained.

More than 2,100 people have died from the coronavirus in China, spreading to more than two dozen countries, and governments around the world are trying to prevent it from becoming a global pandemic.

YEN TUMBLES

The most dramatic move overnight was a steep drop in the Japanese yen, which posted its sharpest fall against the dollar in half a year, even as safe-haven assets such as gold traded firmer.

Selling was broad and sustained through the session.

The yen fell nearly 1.4% against the dollar and the and almost 2% against the Norwegian krone – its sharpest daily drop against the krone in almost three years.

“It is rare to see and gold ripping at the same time, but the simple explanation is that the world is awash in a flood of money and there are not many attractive places to park that excess liquidity,” said Donnelly, Spot FX Trader at HSBC.

The yen recouped some of those losses in morning trade, to rise 0.2% to 111.17 per dollar.

Elsewhere oil prices held overnight gains, while gold gave some of its rise back.

last sat 30 cents firmer at $53.60 per barrel and Brent settled at $59.12. Gold last traded at $1,609.33 per ounce.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Leave a Reply

Your email address will not be published. Required fields are marked *