China Held Rates, Japan to "live with the virus"

Arjun Pandit
20 Jan, 2023
Mumbai

Asian markets advanced after rate hike worries in the U.S. eased and China left its key lending rates unrevised. 

The Nikkei 225 index inched up 0.6% to 26,553.53 and the yen eased to 129.50 against the U.S. dollar. 

Japan's inflation in December surged to 4.0% from a year ago to the highest level since 1991 on the yen weakness and a surge in international commodities prices.

Airline and travel stocks were in demand after Prime Minister Fumio Kishida  announced a plan to downgrade Covid-19 disease to a seasonal influenza in the spring.  

The major policy change since nearly three years of pandemic, Japan will end mask requirements, review border controls and end quarantine requirements.  

The shift in policy comes after three years of strict social mobility restrictions as the nation prepares to live with the virus despite hundreds of deaths daily linked to coronavirus infections. 

“We will step up moves toward living with the coronavirus to restore normalcy to Japan,” Prime Minister Kishida announced today.  

Japan's international arrivals surged 15-fold to 3.1 million in 2022 from the previous year, but the number of arrivals are significantly down from the pre-pandemic level of 32 million in 2019.  

Stocks in China gained after vice premier Sun Chunlan, the leader for the implementation of Covid-19 policy for the last three years, said new infections are at "low level." 

Chunlan sought to reassure residents ahead of the Lunar New Year but infections are expected to surge after the holiday period. 

Stocks also advanced after the People's Bank of China left its key lending rates unchanged for the fifth month in a row. 

One-year Loan Prime Rate was left at 3.65% and five-year rate used for the mortgage market was held at 4.3%. 

The Shanghai Composite index advanced 0.8% to 3,264.81 and the Hang Seng index jumped 1.8% to 22,044.65. 

Hong Kong stocks advanced after the city's jobless rate declined for the eighth month in a row. 

Stocks in Mumbai traded down for the second day in a row after investors reacted to local corporate earnings news. 

Global weakness also contributed to market weakness after Microsoft announced a plan to lay off 10,000 employees and Google's parent Alphabet said it plans to eliminate 18,000 jobs. 

The Sensex index decreased 0.4% or 236.66 points to 60,621.77 and the Nifty index declined 0.4% or 80.20 points to 60,621.77.

The Indian rupee traded higher to 80.98 against the U.S. dollar and the yield on 10-year Indian government bonds closed higher at 7.34%.