SINGAPORE- Asian stock markets edged up on Tuesday while comments from central banks in China and Japan interrupted the dollar’s ascent, giving traders a breather ahead of US inflation data that could influence when or if the Federal Reserve raises rates further.
The yen notched its best day against the dollar in two months overnight, after Bank of Japan Governor Kazuo Ueda said policymakers might have enough economic information by the year-end to determine that short-term rates will need to rise.
The yuan had its best day in six months after authorities vowed to correct one-way moves and Reuters reported the central bank had stepped up scrutiny of dollar buying.
Both, however, remain near their weakest levels of the year and with the yuan at 7.3016 per dollar in offshore trade and the yen was last at 146.68 per dollar, a little weaker than its best level on Monday.
Japanese government bonds remained under pressure on Tuesday, with 10-year JGB yields up 1 basis point to a fresh high of 0.71 percent .
“The result of Ueda’s comments was an intense move higher in Japanese swaps and government bond yields,” said Chris Weston, head of research at brokerage Pepperstone in Melbourne.
“(It) is certainly constructive for yen longs. (But) I refrain from getting too excited at this stage…where the actions are more of a medium-term issue – we won’t get the outcome of the spring wage negotiations until April 2024.”
Investors in China drew some comfort from news that the country’s largest private property developer Country Garden has won approval from creditors to extend repayments on six onshore bonds by three years.
That lifted Hong Kong’s Hang Seng Mainland Properties Index as much as 1.5 percent , reversing an earlier drop of more than 2 percent .
“This is likely just another case of kicking the can down the road, but it seems to have slowed the bleeding on the property index at least,” said Matt Simpson, senior market analyst at City Index.
MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.12 percent . Japan’s Nikkei rose 0.61 percent , with markets looking to US inflation data and this week’s European Central Bank meeting to set interest rate expectations and the mood. – Reuters
