SINGAPORE (Reuters) – Asian stocks rose on Monday on renewed bets that the Federal Reserve would likely ease rates this year, while the yen weakened after a strong surge last week from Tokyo’s suspected currency intervention.
Markets in mainland China opened positively following an extended break, while Japan observed a holiday, thinning trading in Asia.
MSCI’s broadest index of Asia-Pacific shares outside Japan edged more than 0.5% higher, while China’s blue-chip index gained 1.4%.
Chinese shares offshore posted strong gains last week while mainland markets were closed from Wednesday to Friday for the Labour Day holiday.
Hong Kong’s Hang Seng Index rose 4.7% last week and on Friday clocked its longest daily winning streak since 2018. It was last down 0.2%.
The Nasdaq-listed Golden Dragon China Index jumped 5.5% last week.
Similarly, in currency markets, the offshore yuan was last roughly 0.1% lower at 7.2013 per dollar, after strengthening more than 1% last week, in part due to a broadly weaker dollar.
The People’s Bank of China on Monday also lifted its official yuan midpoint to the highest in three weeks, catching up with movements offshore. That sent the onshore yuan to its highest in over a month at 7.2009 per dollar.
“While the overall policy stance is in-line with those set at the National People’s Congress in March, there is a more supportive policy tone on fiscal policy,” said Louisa Fok, China equity strategist at Bank of Singapore.
Moreover, the weakening yen further bolsters Asia Shares Rally, enhancing competitiveness for export-oriented economies. This currency depreciation supports corporate earnings and encourages foreign investment, amplifying the positive market sentiment. Consequently, Asia’s stock markets continue to soar, propelled by a combination of domestic and international factors.
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