By Marketwatch and Associated Press
Asian markets rose in early trading Thursday, showing no significant reaction after China’s central bank set the yuan’s midpoint at its weakest level since 2008.
The People’s Bank of China early Thursday set the yuan’s reference point at 7.0039 against one U.S. dollar. Still, it was not as weak as some had expected, heartening investors that China was not trying to start an all-out currency war. A weakening of the yuan below the critical 7 level on Monday sent global markets tumbling amid fears it was the first step in a currency war, and led the U.S. Treasury Department to label China a currency manipulator for the first time since 1994.
Later Thursday, China posted better-then-expected trade data despite the ongoing trade war with the U.S., showing July exports rose 3.3% year-over-year while imports fell 5.6%, with an overall trade surplus of $45.06 billion. Experts had been predicting exports to fall 2% from last year, and imports to sink 7.3%, with a trade surplus of $38.7 billion, according to the Wall Street Journal.
Japan’s Nikkei /zigman2/quotes/210597971/delayed JP:NIK +1.01% rose 0.6% and Hong Kong’s Hang Seng Index /zigman2/quotes/210598030/delayed HK:HSI +0.10% gained 0.4%. The Shanghai Composite /zigman2/quotes/210598127/delayed CN:SHCOMP +0.15% advanced 0.7% while the smaller-cap Shenzhen Composite /zigman2/quotes/210598015/delayed CN:399106 -0.09% was up 0.6%. South Korea’s Kospi /zigman2/quotes/210598069/delayed KR:180721 +0.18% rose 0.9%. Singapore’s Straits Times Index /zigman2/quotes/210597985/delayed SG:STI -2.17% slipped, but benchmark indexes in Taiwan /zigman2/quotes/210597977/delayed TW:Y9999 +0.56% and Indonesia /zigman2/quotes/210597981/delayed ID:JAKIDX -0.06% gained. Australia’s S&P/ASX 200 /zigman2/quotes/210598100/delayed AU:XJO +0.68% inched up 0.2%.
Among individual stocks, Fast Retaling /zigman2/quotes/200663563/delayed JP:9983 +2.86% and Nikon /zigman2/quotes/203281219/delayed JP:7731 +0.62% gained in Tokyo trading, while SoftBank /zigman2/quotes/207303954/delayed JP:9984 +1.63% and Inpex /zigman2/quotes/206689846/delayed JP:1605 +0.60% fell. In Hong Kong, Tencent /zigman2/quotes/204605823/delayed HK:700 +1.02% and Sunny Optical /zigman2/quotes/206687505/delayed HK:2382 +1.05% advanced, and Hyundai Motor /zigman2/quotes/206684590/delayed KR:005380 +1.04% surged in South Korea. Taiwan Semiconductor /zigman2/quotes/207385621/delayed TW:2330 0.00% and Foxconn /zigman2/quotes/204111604/delayed TW:2354 -0.75% rose in Taiwan, while Rio Tinto /zigman2/quotes/200083756/delayed AU:RIO -0.02% and Oil Search /zigman2/quotes/204702973/delayed AU:OSH +2.40% gained in Australia.
Investors were rattled Wednesday by a wave of interest rate cuts by central banks in India, Thailand and New Zealand. That adds to rate cuts since May in Australia, South Korea and the Philippines in response to fear U.S.-Chinese trade tension will dent global economic growth.
“Trade anxiety remains high, impacting equities,” said Alfonso Esparza of Oanda in a report.
On Wall Street, the benchmark S&P 500 index /zigman2/quotes/210599714/realtime SPX +0.24% rose 0.1%, to 2,883.98. It had been down 2% during the heaviest bout of selling. The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA -0.04% dropped 0.1% to 26,007.07. The Nasdaq composite index /zigman2/quotes/210598365/realtime COMP +0.43% climbed 0.4% to 7,862.83.
Last week, President Donald Trump rattled markets when he promised to impose 10% tariffs on Sept. 1 on all Chinese imports that haven’t already been hit with tariffs of 25%. China struck back on Monday, allowing its yuan to weaken against the U.S. dollar.
The yuan fell further Tuesday and Wednesday, but investors were encouraged by Chinese central bank promises the decline wouldn’t continue and the exchange rate would be kept stable.
Benchmark U.S. crude jumped $1.46 to $52.55 per barrel in electronic trading on the New York Mercantile Exchange. The contract plunged $2.54 on Wednesday to close at $51.09. Brent crude , used to price international oils, rose $1.53 per barrel in London to $57.76. It dropped $2.71 the previous session to $56.23.
The dollar /zigman2/quotes/210561789/realtime/sampled USDJPY +0.0297% declined to 106.16 yen from Wednesday’s 106.26 yen.