Yahoo Finance Asian Stock Traders “Cautiously Optimistic”; U.S. Wants Stable Yuan as Part of Trade Deal
Uncertainty over the progress of U.S.-China trade negotiations, and general nervousness head of the release of the U.S. Federal Reserve’s monetary policy meeting minutes at 19:00 GMT contributed to today’s mixed-to-higher trading session in Asia. Early in the session, the major indexes were supported by positive comments from U.S. President Donald Trump who hinted once again that he was flexible with the March 1 trade deal deadline.
In Japan, the Nikkei 225 Index traded 21431.49, up 128.84 or +0.60%. In Hong Kong, the Hang Seng Index was at 28462.04, up 233.91 or +0.83%. South Korea’s KOSPI Index was at 2229.76, up 24.13 or +1.09%. China’s Shanghai Index finished at 2761.22, up 5.57 or +0.20% and Australia’s S&P/
ASX 200 Index settled at 6096.50, down 10.40 or -0.17%.
Gains were limited in the Nikkei 225 Index because of weaker-than-expected Japan Trade Balance data. In Hong Kong, the Hang Seng was supported by the news that Alibaba had increased its stake in China International Capital Corp by almost 12 percent.
Asian Traders “Cautiously Optimistic”
The price action in Asia is being described as “cautiously optimistic” with investors nervous about the lack of major progress in the trade talks, but leaning toward the upside. Many feel that trade talks will continue beyond the March 1 deadline if progress is made when the two sides meet in Washington this week.
Traders are also saying that an extension to the deadline will indicate that the easiest part of the negotiations is over. This would then allow negotiators to work out the more difficult parts of the deal. These include issues on intellectual property transfer and other structural issues.
Investors are also curious about what the Fed has to offer in its minutes. The Fed flipped to the dovish side in its monetary policy statement released in January. However, investors are curious about what policymakers had to say about the Fed balance sheet. Stocks could surge if the Fed minutes are dovish.
Report: U.S. Wants Stable Yuan as Part of Deal
The offshore Chinese Yuan rallied sharply higher on Tuesday after Bloomberg News reported that the U.S. is requesting that China keep the Yuan stable as part of the trade deal. The move would be aimed at mediating any effort by the Chinese to devalue the Yuan to counter American tariffs, people familiar with the situation told Bloomberg News.
The Trump administration has insisted that moves to devalue the Yuan to buoy Chinese exports would be countered with additional or more severe American tariffs, sources told Bloomberg News.
This article was originally posted on FX Empire
