TOKYO (AP) – Buying in Asian stocks started on Monday after the US National Day.
Analysts said the optimism could be fueled by hopes that the US might decide to lower China’s tariffs, a welcome move that would also help tame inflation.
China’s Commerce Ministry said Tuesday that Vice Premier Liu He held talks with Finance Minister Janet Yellen on coordinating economic policies between the two largest economies and maintaining supply chain stability.
A statement also said that the Chinese side “has expressed its concerns over issues such as the lifting of additional tariffs and sanctions that the United States has imposed on China and the fair treatment of Chinese companies.” Both sides agreed to continue talks, the statement said.
Investors have also been heartened by the lifting of coronavirus pandemic-related restrictions across the region, including Japan, which was experiencing a boom in overseas tourists before the pandemic.
“The quiet economic calendar tomorrow pushes sentiment to focus on a single easing headline from a possible US tariff relaxation decision that could risk a sharp drop in speculative bullish bets if there is no action,” Inflation Overcoming Yep Jun Rong, Market Strategist at IG in Singapore said in a comment.
However, some countries remain at risk from inflation and slowing economic activity. There is also a resurgence of COVID-19 infections in Europe, America and parts of Asia, threatening a reversal in pandemic precautions.
Japan’s benchmark Nikkei 225 rose nearly 1.0% to 26,404.90 in morning trade. South Korea’s Kospi rose 1.8% to 2,342.24. Hong Kong’s Hang Seng was up 0.8% to 21,997.04, while the Shanghai Composite was up 0.1% to 3,409.95.
Australia’s S&P/ASX 200 rose 0.4% to 6,637.50 after the central bank raised its benchmark interest rate for the third time in three straight months, changing the policy rate to 1.35% from 0.85%. The Reserve Bank of Australia’s half a percentage point hike on Tuesday was roughly the same as its June hike.
When the bank raised interest rates by a quarter of a point at its monthly board meeting in May, it was the first rate hike in more than 11 years.
Global investors are concerned about rising inflation and the possibility that higher interest rates could trigger a recession in some economies. The US store was closed Monday for Independence Day.
Minutes of the Federal Reserve’s latest monetary policy meeting will be released on Wednesday and could provide clues to future policy.
Futures for the Dow Industrials and S&P 500 were up 0.4% early Tuesday.
The stock ended the week rallied, with the S&P 500 gaining 1.1%. The Dow was up 1 percent and the Nasdaq was up 0.9 percent. The Russell 2000 Index of Small Companies gained 1.2%.
In the first half of this year, the S&P 500’s performance was its worst since the first six months of the 1970s. It is now down 20.2% from its peak earlier this year.
The risk of a recession increases as the US Federal Reserve aggressively hikes interest rates. The Fed is raising rates to deliberately slow economic growth to curb inflation, but that could potentially go too far and lead to a recession.
In Germany, Chancellor Olaf Scholz gathered representatives of top employers and unions in his Berlin office on Monday to explore ways to deal with the impact of rising prices while halting a spiraling inflation in Europe’s largest economy. can be done.
U.S. crude rose $1.87 to $110.30 a barrel in energy trading. On Friday, it rose $2.67 to $108.43 a barrel. The shop was closed on Monday. Internationally, Brent crude fell 3 cents to $113.47 a barrel.
In forex trading, the US dollar rose to 136.15 yen from 135.69 yen. The euro price is $1.0434 versus $1.0423.
Yuri Kageyama is on Twitter