China Property Stimulus Lifts Hopes, Japan Bond Yields at 6-year High

Arjun Pandit
13 Jan, 2023
New York City

Asian markets traded mixed after the yen and the Japanese government bond yields rose. 

Markets in the region reacted to local economic news and government actions and crude oil prices advanced on the hopes of a demand recovery in China. 

 

Yen and JGB Yields Advance 

Japan's benchmark indexes traded lower on the worries that the rising yen may negatively impact exporting companies. 

Taiwan-based TSMC said that the company is considering expanding its chip production operation in Japan if "demand from customers and the level of government support makes sense." 

The Nikkei 225 average declined 1.3% to 26,119.52 and the yen rose to a seven-month high after Japanese government bond yields rose to a seven-year high to 0.545%. 

 

Hong Kong Stocks Rebound on Property Market Stimulus 

Hong Kong stocks surged after the government's task force said it plans to provide US$67 billion in liquidity to a select list of 30 developers and support the property market, according to a report from the state-controlled news agency Xinhua. 

About 50 Chinese property developers have defaulted on $100 billion in loans to international investors in the last two years, according to an estimate by JPMorgan. 

 

People's Bank of China to Pursue Flexible Yuan Policy 

Mainland China stocks also gained after the People's Bank of China showed more willingness to pursue "flexible yuan" to support domestic price stability and growth as advanced economies adjust.  

The Shanghai Composite index increased 1% to 3,195.31 and the Hang Seng index advanced 1% to 21,738.66. 

 

India Stocks Rebound On Moderating Inflation 

Market indexes in Mumbai rebounded after consumer price inflation in December fell for the third month in a row and the index stayed below the Reserve Bank of India's target range between 2% and 6%. 

Industrial production also rebounded in November and gold imports plunged almost 80% in December, raising the prospect of stronger rupee and better earnings in the December quarter. 

The Sensex index in Mumbai rebounded 0.5% to 60,261.18 and the Indian rupee recovered to one-month high to 81.20 against the U.S. dollar.