Asia-Pacific markets up as investors watch oil prices, yen weakness

SINGAPORE – Stocks across Asia-Pacific rose, following a tumble in oil prices overnight. Bitcoin meanwhile surged past a key level, and the yen continued to weaken.

Hong Kong’s Hang Seng index jumped 0.45%, as casino and tech stocks rose. Among the biggest gainers was JD Health, which soared nearly 16%, after it said Monday it would conduct a share buyback of up to 3 billion Hong Kong dollars over a 24-month period.

Property shares however went against the wider trend, as Sunac plummeted nearly 20% and Shimao lost 7%. China’s CSI real estate index lost as much as 2% earlier, but pared losses to decline 0.61%.

Sunac late Monday said it would halt trading from April 1, days after it said it would delay reporting its 2021 financial results and joining a growing list of Chinese developers who are unable to release earnings on time.

Mainland China shed earlier gains, with the Shanghai composite inching down 0.43% while the Shenzhen component slid 0.57%.

Japan’s Nikkei 225 was 0.51% higher, while the Topix rose 0.43%. Tech stocks were up, with Sony rising nearly 1% and SoftBank Group up 1.61%.

The yen was in focus for investors, after the Bank of Japan’s offer Monday to buy unlimited amounts of 10-year JGBs at 0.25% for the first four days of this week. The yen fell and was last trading at 123.25 per dollar as it hovered near a six-year low.

The yen weakness sparked comments from Japanese officials on Tuesday, with Finance Minister Shunichi Suzuki saying Japan will carefully watch foreign exchange moves to avoid “bad yen weakening,” Reuters reported.

“The Japanese yen remains the main story in FX land with USD / JPY extending its vertical rise over the past 24 hours,” wrote Rodrigo Catril, senior foreign exchange strategist at National Australia Bank in a Tuesday note.

One big factor of recent yen weakness had been the Bank of Japan’s yield curve control (YCC) policy which has confined the 10-year Japanese government bond (JGBs) rate to within a 0.25% range, even as core global bond yields have risen, Catril explained. That policy entailed keeping its 10-year government bond yield around or near zero.

Markets were wondering if commitment to that policy was “wavering” amid concerns over rising inflation, Catril said. But the central bank’s move to buy the JGBs “sent a strong signal that YCC is here to stay for a while yet.”

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That pushed the yen to a seven-year low of 125 against the dollar on Monday. but later regained some ground to a six-year low of 124, according to Reuters.

“The affirmation of its YCC commitment, triggered an aggressive yen selling with USD / JPY rising to a high of ¥ 125.09, before easing down to ¥ 123.87 currently,” Catril said Tuesday morning.

“Expect the Bank of Japan to keep buying unlimited bond to cap the [10-year] JGB yield at the 0.25% limit under the yield curve control framework, “DBS foreign exchange strategists Eugene Leow and Philip Wee said in a note.

In other Asia-Pacific markets, Australia’s S & P / ASX 200 jumped 0.77%, as bank stocks rose. However, some miners and oil stocks declined, bucking the trend. South Korea’s Kospi was up 0.27%.

Australia reported retail sales for February, which beat expectations, jumping 1.8% from January to hit $ 33.1 billion Australian dollars ($ 24.8 billion). That beat forecasts of a 1% gain, according to a Reuters poll.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.47%.

Oil prices slump

Currencies

Bitcoin broke past the key level of $ 45,000 overnight and erased its losses for 2022, jumping as high as 6.7% to $ 47,914.35. During Asia trade, it reversed earlier gains to last decline 1.38% to $ 47,352, according to Coin Metrics.

The US dollar index, which tracks the greenback against a basket of its peers, was at 99,054 – jumping from levels around 98.8 from previous sessions.

The Australian dollar was at $ 0.7482, a touch softer than levels around $ 0.75 before.

– CNBC’s Arjun Kharpal contributed to this report.

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