Asian markets mostly rose Thursday as regional investors began to return from their Lunar New Year break, though Tokyo edged lower after a negative lead from Wall Street.
Most trading floors have reopened but business remains light, with Hong Kong and Shanghai still closed, while focus turns on the resumption next week of China-US trade talks in Beijing.
The two sides will try to hammer out a deal to resolve their long-running tariffs row, with markets broadly hopeful just three weeks before a deadline that will see the US more than double levies on hundreds of billions worth of Chinese goods.
Donald Trump has said he plans to meet his Chinese counterpart Xi Jinping before the end of the month to put the finishing touches to any deal, which would be in both countries’ interest as the global economy begins to wobble.
In morning trade Sydney climbed more than one percent and Wellington put on 0.8 percent with investors cheered by the prospect of an extended period of low interest rates.
Seoul edged up 0.2 percent and Singapore put on 0.6 percent with Manila and Jakarta also up.
However, Tokyo fell 0.7 percent by the break despite a 17 percent surge in SoftBank, its biggest rise in a decade, fuelled by news of a $5.5 billion share buyback using cash from last month’s listing of its mobile phone unit.
– Aussie, kiwi sink –
On currency markets the New Zealand dollar tanked more than one percent on the back of weak jobs data while the Australian dollar extended Wednesday’s sell-off that was fuelled by comments from the country’s top central banker hinting interest rates would not rise any time soon. Analysts pointed to the units’ correlation to China’s economy, which is stuttering at the moment, uncertainty on Wall Street and nervousness ahead of
the trade talks.
Dealers are also looking ahead to the Bank of England’s latest policy meeting later in the day, which comes as the government struggles to push through its Brexit plan and concerns build that the country will leave the EU without a deal on March 29.
It also follows a number of dovish statements from central banks around the world as their boards grow increasingly worried about the global economic outlook.
BoE boss Mark Carney “has been quite vocally Brexit’s Angel of Death and an uber-dove for quite some time, but with central banks shifting policy stance around the world, tonight’s BoE rate decision and Carney’s missives could have a real impact on the pound”, said OANDA senior market analyst Jeffrey Halley.
The pound has weakened more than two percent against the greenback in the past 12 days as investors grow increasingly worried about a so-called hard Brexit.
– Key figures around 0230 GMT –
Tokyo – Nikkei 225: DOWN 0.7 percent at 20,736.89
Hong Kong – Hang Seng: Closed for a public holiday
Shanghai – Composite: Closed for a public holiday
Euro/dollar: DOWN at $1.1360 from $1.1406 at 2140 GMT
Dollar/yen: DOWN at 109.76 yen from 109.97 yen
Pound/dollar: DOWN at $1.2930 from $1.2936
Oil – West Texas Intermediate: DOWN 15 cents at $53.86 per barrel
Oil – Brent Crude: DOWN cents at $62.49 per barrel
New York – Dow: DOWN 0.1 percent at 25,390.30 (close)
London – FTSE 100: DOWN 0.1 percent at 7,173.09 (close)