Asian stocks climb as US yields ease, China signals economic support

A man wearing a protective mask, amid the coronavirus disease (COVID-19) outbreak, walks past an electronic board displaying Japan’s Nikkei index and stock index prices for various countries outside a brokerage house in Tokyo , Japan, February 22, 2022. REUTERS/ Kim Kyung Hoon

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  • Nikkei rises 1.2%; Chinese stocks up 1.2%
  • European and American futures on the rise
  • The dollar retreats against the yen, the euro; US yields ease
  • China’s easing signal bolsters sentiment
  • Bank of Korea Raises Rates; Singapore tightens

BEIJING, April 14 (Reuters) – Asian stocks followed Wall Street higher on Thursday as U.S. Treasury yields eased and the dollar retreated as the latest U.S. data raised hopes that inflation could be close to a peak, although several major central banks have raised rates aggressively. .

Traders were waiting for a European Central Bank meeting later today to see if it was as hawkish as others have been. Read more

Equity market sentiment was boosted by China’s announcement on Wednesday evening that authorities should soon cut banks’ required reserve ratios (RRRs) to support an economy battered by COVID-19 lockdowns. [nL2N2WB0UH]

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MSCI’s broadest index of Asia-Pacific stocks outside Japan (.MIAPJ0000PUS) rose 0.4%, supported by a 0.5% gain in resource-rich Australian stocks (.AXJO) and a 1% gain. .2% of blue-chip Mainland China stocks (.CSI300). The Japanese Nikkei (.N225) rose 1.2%.

European markets are set to open higher, with EUROSTOXX 50 futures up 0.56%, Germany DAX futures up 0.56% and FTSE futures up 0. 24% in Asian trade.

S&P500 futures rose 0.2% and Nasdaq futures rose 0.4%.

David Chao, Hong Kong-based global market strategist at Invesco, said several developments dominated stocks on Thursday, including moderating U.S. core consumer price gains, which could mean inflationary pressures could soon begin to subside, and China’s announcement of increased political support.

“I argued that a recovery in money supply and credit growth could provide a floor for Chinese equities and signal that investor sentiment may soon start to improve, especially if COVID and concerns geopolitics are starting to fade,” Chao said.

Elsewhere, other central banks added to the hawkish global mood ahead of the ECB meeting. The Bank of Korea surprised markets with a rate hike and the Monetary Authority of Singapore also tightened policy.

It didn’t seem to affect sentiment much. South Korean shares KOSPI (.KS11) reversed earlier losses to rise 0.1%, while Singapore’s benchmark Straits Times Index (.STI) also rose slightly.

Stock markets suffered from aggressive central banks, but all three Wall Street indices gained more than 1% on Wednesday.

Asian markets including Hong Kong, Singapore and Australia are on vacation Friday for the Easter long weekend, as are major European and US markets.

Hopes that US inflation had peaked led US Treasury yields to extend their decline on Thursday. The yield on 10-year Treasury bills was 2.6636%, down from a three-year high of 2.836%, before data released on Tuesday showed inflation lower than feared by investors.

The two-year yield, which rises on traders’ expectations of a hike in the fed funds rate, touched 2.3156%, down from a close of 2.3645% a day earlier.

The pullback in US yields offered some relief to the battered yen on Thursday, with the safe-haven currency up 0.3% against the greenback. It had weakened past the 126 yen per dollar mark in the previous session.

The prospect of rapid and aggressive interest rate hikes in the US and growing market expectations that the Bank of Japan will keep rates extremely low in the near term have weakened the yen.

The euro also gained 0.2% against the dollar, although it was not too far off its one-month low on concerns over the war in Ukraine.

Ukraine warned on Wednesday that Russia was stepping up its efforts in the south and east as it seeks full control of Mariupol, while Western governments pledge more military aid to bolster kyiv. Read more

Oil prices fell on Thursday, after rising sharply in the first half of the week, as traders weighed a bigger-than-expected rise in U.S. oil inventories against a tightening in global supply.

U.S. crude fell 0.48% to $103.75 a barrel. Brent fell 0.1% to $108.70 a barrel.

Gold was down slightly, hovering around its 1-month high. Spot gold was trading at $1,974.72 an ounce.

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Editing by Simon Cameron-Moore and Kim Coghill

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