What you need to know:
Japanese 10-year government bond yield steady.
> Asia-Pacific stocks climb.
> Renminbi touches fresh one-year low.
> Oil prices lower.
Government bonds stabilised following a jump in yields in the previous session, while Asia-Pacific equities echoed gains in US markets and the Chinese renminbi continued to weaken.
Global bond markets recovered some poise following a sharp rise in yields during the previous two trading sessions after a media report that the Bank of Japan was considering a change to its policy stance.
The yield on 10-year Japanese government bonds was flat at 0.071 per cent, after rising to its highest level in six months on Monday.
The 10-year US Treasury yield, which hit a five-week high on Monday, was flat at 2.950 per cent while the yield on comparable Australian government bonds rose 4 basis points to 2.707 per cent.
Stock markets across the region were higher. In Hong Kong, the Hang Seng index was on track for its biggest gain since June, rising 1.1 per cent as financials climbed 2.5 per cent and the technology sector added 06 per cent.
The Hang Seng China Enterprises index of Hong Kong-listed Chinese companies rallied 2.6 per cent as construction and infrastructure-related stocks jumped after Beijing promised to adopt measures to boost economic demand, including speeding up the issuance of special bonds to local governments to support infrastructure projects.
In mainland China, the CSI 300 index of major companies listed in Shanghai and Shenzhen climbed 1.7 per cent to a one-month high as construction stocks rallied. Chinese vaccine producer Changsheng Biotechnology once again fell by the 10 per cent daily limit after police launched an investigation into a vaccine scandal involving the company.
Japan’s Topix gained 0.6 per cent with financials up 0.9 per cent and industrials rising 0.9 per cent.
In Australia, the S&P/ASX 200 added 0.6 per cent, lifted by a 1.2 per cent rise for the basic materials sector and a gain of 0.4 per cent by financials.
Overnight on Wall Street, the S&P 500 ended 0.2 per cent higher while the Nasdaq Composite closed up 0.3 per cent.
In currency markets, the Chinese renminbi weakened to a new one-year low against the US dollar a day after the People’s Bank of China injected $74bn into the country’s banking system — the latest in a series of recent indications Beijing is moving to ease monetary policy.
The offshore renminbi weakened as much as 0.6 per cent to a low of Rmb6.8443, its lowest point against the dollar since June last year. The onshore renminbi, which is permitted to trade 2 per cent to either side of a daily midpoint set by the country’s central bank, weakened as far as Rmb6.8246 per dollar, also its lowest level since June 2017.
The dollar index, a measure of the greenback against a basket of peers, was flat at 94.629. The Japanese yen was little moved against its US counterpart at ¥111.18, but still near two-week lows. Among other major currencies, the UK pound was virtually unchanged at $1.3096 and the euro was almost unmoved at $1.1685.
Oil prices were lower as the previous day’s upward momentum, due to the latest US-Iran tensions, faded away. Brent crude retreated 0.3 per cent to $72.86 a barrel and West Texas Intermediate dropped 0.3 per cent to $67.69 a barrel.
Gold was 0.2 per cent lower at $1,221 an ounce.