In Beijing, China, a logo for the Hong Kong Stock Exchange (HKEX). 4 September 2020 Tingshu Wang/Tingshu Wang/Tingshu Wang/Tingshu Wang/Tingshu (Reuters) – TOKYO, July 15 (Reuters) – Asian stocks rose on Thursday as China’s economy data was more resilient than expected, and US Federal Reserve Chair Jerome Powell suggested tapering of the country’s enormous stimulus program was still a long way off. The MSCI Asia-Pacific stock index outside of Japan (.MIAPJ0000PUS) rose 0.4 percent, while Hong Kong’s Hang Seng (.HSI) rose 1.0 percent. The CSI300 index (.CSI300) was practically flat, indicating that mainland Chinese stocks were barely altered. On an annual basis, China’s second-quarter economic growth fell just short of expectations, with GDP growth dropping to 7.9% from a year earlier after a record 18.3 percent expansion in January-March. However, seasonally adjusted quarterly growth of 1.3 percent in April-June was slightly stronger than projected. find out more Retail sales, industrial output, and fixed investment growth all slowed in June, although not as much as expected, leading to speculation that policymakers will do more to help the recovery. China’s central bank injected 100 billion yuan ($15.46 billion) earlier in the day to partially roll over maturing one-year medium-term lending facility (MLF) loans. find out more Following the PBOC’s announcement last week that it would reduce the amount of cash banks must retain as reserves, around 1 trillion yuan in long-term liquidity was released into the Chinese financial system on Thursday. “The PBOC is loosening in general, but it is not overwhelming the financial system like the Fed. Today’s economic data wasn’t all that horrible, either “AllianceBernstein fund manager Masahiko Loo said. Japan’s Nikkei (.N225) bucked the trend, tumbling 0.9 percent on concerns about rising domestic COVID-19 infections. The S& Powell said the U.S. economy was “still a ways off” from the levels the central bank wants to see before decreasing its monetary assistance in testimony to the U.S. House of Representatives Financial Services Committee. find out more He also expressed confidence that recent price increases are due to the country’s post-pandemic recovery and will subside. His remarks come as statistics released this week revealed that consumer prices rose the most in 13 years in June, while producer prices raced to their highest annual gain in almost a decade. find out more Powell reassured markets that the Fed is not overly concerned about inflation, according to Chotaro Morita, chief rates strategist at SMBC Nikko Securities. Global bond yields fell, with the 10-year US Treasury yield falling to 1.336 percent after peaking at 1.423 percent on Wednesday. The real yield on inflation-protected bonds fell below minus 1.0 percent, remaining near its lowest level since February. “Given that bond yield declines began before Powell’s speech, the market was probably driven more by short-covering and unwinding of underweight positions than Powell’s comments per se,” SMBC Nikko’s Morita added. Powell’s dovish tone dented the US dollar in the currency market. The euro rose to $1.1826 from a three-month low of $1.1772 on Wednesday. After a 0.6 percent drop on Wednesday, the dollar was trading at 109.88 yen. After hitting a three-week high of 6.4508 overnight, the Chinese yuan fell to 6.4693 per dollar in Asia. On Wednesday, gold hit a one-month high of $1,829.8 per ounce, before settling at $1,826.1. Oil prices fell after major global oil producers reached an agreement on supply and after statistics from the United States indicated that demand had slowed slightly in the previous week. find out more Brent crude prices fell 0.8 percent to $74.18 per barrel, while US crude futures down 1.0 percent to $72.40 per barrel. ($1 = 6.4693 Chinese yuan renminbi renminbi renminbi renminbi renminbi renminbi Sam Holmes and Kim Coghill edited the piece. The Thomson Reuters Trust Principles are our standards./n
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