Asian indexes mostly steadied on Wednesday with uncertainty over China’s recovery pace dampening enthusiasm across trading floors.
The exception was Japan where its central bank’s decision to stand firm on its ultra-easy approach saw the main Nikkei index surge, with technology heavyweights leading the way.
Tokyo’s share average jumped to its highest close in a month after the Bank of Japan maintained ultra-low interest rates, including its 0.5% cap for the 10-year bond yield, defying market expectations it would phase out its massive stimulus programme in the wake of rising inflationary pressures.
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The Nikkei advanced 2.5% to 26,791.12, its highest close since December 19, the day before the BOJ shocked the markets by doubling the band for the 10-year JGB yield. The index also posted its biggest daily gain since November 11.
The broader Topix was up 1.68%, or 32.04 points, to 1,934.93.
China stocks seesawed in thin trading as many urban workers left ahead of the Lunar New Year holidays and with some investors cashing in ahead of the markets closing for the festival.
Millions of city dwellers are on the move across China ahead of the expected Friday peak of its annual mass migration, as China’s leaders looked to get its Covid-battered economy moving. The week-long holiday officially starts on January 21.
While many analysts say a return to economic normality will be gradual as the impact of Covid weakens, some see the Lunar New Year as a welcome early consumption boost.
But with so many people on the move, health experts fear a deepening of the Covid outbreak, leaving the elderly in rural villages particularly vulnerable.
China’s blue-chip CSI 300 Index slipped 0.2% and the Shanghai Composite Index ended almost flat, rising 0.01%, or 0.16 points, to 3,224.41, while the Shenzhen Composite Index on China’s second exchange edged up 0.18%, or 3.69 points, to 2,097.95.
Hang Seng China Enterprises Index edged up 0.4% while Hong Kong’s main benchmark gained 0.47%, or 100.36 points, to 21,678.00.
Indian stocks advanced with Mumbai’s signature Nifty 50 index up 0.61%, or 110.50 points, at 18,163.80.
US Dollar Gains on Yen
MSCI’s broadest index of Asia-Pacific shares outside Japan eased 0.3%, after weak earnings from Goldman Sachs overnight dragged the Dow Jones index 1% lower. The investment bank reported a bigger-than-expected 69% drop in fourth-quarter profit.
The dollar gained 2.6% against the Japanese yen to 131.4 yen, its biggest one-day percentage jump since March 2020.
S&P 500 futures and Nasdaq futures were mostly flat. Overnight, the S&P 500 was 0.2% lower and the Nasdaq Composite rose 0.14%.
In the Treasury market, the yield on benchmark 10-year Treasury notes slid 5 basis points to 3.4531%, while the yield on three-year Treasury notes stood at 3.8442%, easing from 3.8640%.
In the oil market, prices jumped on hopes of Chinese demand rebounding. Brent crude futures rose 0.6% to $86.5 while US West Texas Intermediate crude settled up 0.8%, at $80.79.
At the World Economic Forum in Davos on Tuesday, German Chancellor Olaf Scholz said he was convinced Europe’s largest economy would not fall into a recession.
China’s Vice Premier Liu He also welcomed foreign investment and declared his country open to the world after three years of pandemic isolation.
Data on Tuesday showed China’s economic growth had slumped in 2022 to 3.0% – its weakest rate in nearly half a century.
Key figures
Tokyo – Nikkei 225 > UP 2.50% at 26,791.12 (close)
Hong Kong – Hang Seng Index > UP 0.47% at 21,678.00 (close)
Shanghai – Composite > UP 0.01% at 3,224.41 (close)
London – FTSE 100 > UP 0.14% at 7,861.73 (0935 GMT)
New York – Dow < DOWN 1.14% at 33,910.85 (Tuesday close)
- Reuters with additional editing by Sean O’Meara
Read more:
Japanese Yen Falls After BOJ Keeps Low Rates, Bond Yield Cap
China’s 2022 Growth of 3% Among the Worst in 50 Years
