Asian stocks rose on Tuesday, supported by hopes of Beijing and Washington would re-elect trade hostilities, although comments from the U.S. President about the yuan and Federal Reserve policy limited profits and burdened the dollar.
FILE PHOTO-men go past an electronic board showing market indices outside a brokerage in Tokyo, Japan, 2. Retrieved March 22, 2014. REUTERS / Thomas Peter
In an interview with Reuters on Monday, President Donald Trump said that China manipulates its currency to pay for the duties imposed by Washington on some imports from China. This kept global trade conflict concerns alive and bowed some of the market’s optimism before the upcoming trade talks between the US and China.
He also said that he believed that the euro was being manipulated.
Mscis broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS rose 0.6 percent.
Australian shares lost 0.9 percent, South Korea KOSPI .KS11 gained 0.3 percent and Japan’s Nikkei .N225 fell 0.1 percent.
The Wall Street the main indexes rose on Monday on optimism over trade talks between the United States and China, although they fell from session highs after Trump’s comments. [.And]
The immediate focus was on lower-level trade talks that should start this week between the United States and China. Speculation that the talks could help alleviate trading tensions has supported the wider stock markets in recent meetings.
However, market optimism was tested after Trump said that He did not” expect much ” from the discussions.
“Given the low level of progress in the US-China negotiations over the past six months, investors’ expectations are still low, ” said Tai Hui, global market strategist at J. P. Morgan Asset Management.
“The current negotiations are good news,and that is what the market is riding at this stage, but a sustainable agreement to end this tension still seems unlikely at this point.”
Chinese shares rose with the Shanghai Composite Index .SSEC rising more than 1 percent, supported by bargain-hunting consumer and health companies according to their recent slump.
On the foreign exchange markets, the dollar came under pressure after Trump again expressed his displeasure at the Fed’s interest rate hikes and said that the Central Bank should do more to help him boost the US economy.
“The Fed saw its hawkish stance at the August session have strengthened. But since then, the side-effects of the US – China trade appear to have begun the war, and Republicans fought to win a special election in Ohio,” said Daisuke Uno, chief strategist at Mitsui Sumitomo Bank in Tokyo.
“Against this background, Trump seems to have become more recent jab at the Fed compared to the last time (end of July).”
The dollar index against a basket of six major currencies .DXY was increased by 0.35 percent to 95,549, expanding losses from the previous day.
The euro broke a 12-day high of $ 1.1544 EUR=, stretched its profits after climbing over 0.35 percent overnight.
The U.S. currency touched 109,775 yen JPY=, its lowest since the end of June.
The onshore Chinese yuan CNY=CFXS rose to up to 6,828 per dollar, the strongest since Aug. 9. The currency was on course for its fourth session of gains, further away from 6,934, its weakest since January of 2017 marked last week.
China’s yuan has weakened to a 19-month low against the dollar this month amid concerns about the country’s economic growth, Sino-US trade war worries and a broad rally in the dollar.
The yuan has since withdrawn slightly from the bottom, with the People’s Bank of China perceived the steps taken by investors that the authorities did not allow the currency to depreciate indefinitely.
The yield of the 10-year us Treasury note US10YT=RR was close to a six-week low of 2,815 percent fell overnight in the Wake of the Trump interest rate comments.
Oil prices were mixed after the profit of the previous day, as investors grew more concerned about an expected decline in supply from Iran due to U.S. sanctions. [O / R]
U.S. crude futures CLc1 were 0.33 percent to $ 66.65 per barrel, while Brent LCOc1 fell by 0.1 percent to $72.12 per barrel.
Reporting by Shinichi Saoshiro; Additional reporting by the Tokyo markets team; editing by Eric Meijer and Sam Holmes