INSUBCONTINENT EXCLUSIVE:
TOKYO: Asian stocks edged up to a more than four-month high on Wednesday, lifted by optimism that the United States and China might be able
to hammer out a deal to resolve their nearly year-long trade dispute.
MSCI's broadest index of Asia-Pacific shares outside Japan rose as
much as 0.5 per cent to hit its highest level since early October.
Japan's Nikkei average climbed 1.3 per cent to mark an eight-week high,
while South Korea's KOSPI gained 0.5 per cent.
China's benchmark Shanghai Composite and the blue-chip CSI 300 advanced 0.4 per cent and 0.6
per cent, respectively, and Hong Kong's Hang Seng was up 0.6 per cent.
Asia took its cue from Wall Street, where the Dow and Nasdaq each
rallied about 1.5 per cent overnight on optimism over US-China trade negotiations and a tentative US congressional spending deal to avert
another partial government shutdown
US President Donald Trump said on Tuesday that he could see letting the March 1 deadline for reaching a trade agreement with China slide a
little if the two sides were close to a complete deal.
Officials in Washington and Beijing had expressed hopes that a new round of talks
which began this week would bring them nearer to easing their seven-month trade war.
"We are currently seeing negative sentiment which had
built up over trade concerns and US fiscal issues being unwound," said Soichiro Monji, senior economist at Daiwa SB Investments in
Tokyo.
"For risk assets to move purely on optimism, the US-China trade row will need to see some kind of a closure in March
A more permanent solution to avoid a US government shutdown is also necessary
It has to be remembered that we are not there yet."
US congressional negotiators cobbled together a tentative bipartisan border security
deal late on Monday to avert another partial government shutdown
However, Trump on Tuesday expressed displeasure with the agreement and said he had yet to decide whether to support it.
The Cboe Volatility
Index, Wall Street's so-called "fear gauge," dropped to as low as 14.95, its lowest level in more than four months, overnight.
With risk
aversion ebbing for the time being, safe-haven government bonds were sold and their yields rose
The 10-year US Treasury note yield extended an overnight rise and edged up to a near one-week high of 2.694 per cent
The dollar was on the defensive as investors shifted their money to riskier assets amid the US-China trade-talk hopes
The dollar index stood at 96.697 after its eight-day winning run came to an end overnight to push it away from a two-month peak.
The euro
was a shade higher at $1.1333 having gained 0.5 per cent the previous day, when it bounced from a three-month low of $1.1258.
The dollar was
steady at 110.57 yen.
The kiwi dollar jumped as much as 1.4 per cent to a one-week high of $0.6829 after the Reserve Bank of New Zealand
held the official cash rate at a record low of 1.75 per cent and emphasised its neutral stance
The central bank pushed back its forecasts for when it would hike rates to March 2021 from the September 2020 projected in its last
statement in November.
In commodities, US crude oil futures were up 1.0 per cent at $53.64 per barrel after rallying 1.3 per cent on
Tuesday.
Oil prices surged on Tuesday after OPEC figures showed it cut production sharply in January, and as lead member Saudi Arabia said
it would reduce its output in March by an additional 500,000 barrels
