(Bloomberg) — Asian stocks rose for a third day, buoyed by advances in Japan and Hong Kong, in an extension of a recent shift toward non-US assets amid uncertainties unleashed by Donald Trump.
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Hong Kong equity benchmarks gained about 2%, boosted by BYD Co. shares at a record after it unveiled a new charging system for electric cars. Japanese gauges were up more than 1% after Berkshire Hathaway Inc. increased its stakes in the country’s biggest trading houses, underscoring expectations of longer-term growth prospects.
As US stocks tipped into a correction earlier, global investors are hunting for opportunities elsewhere with Chinese and Japanese equities among the beneficiaries in recent weeks. A pivot by China toward stoking domestic consumption with Monday’s briefing, which would make the economy less vulnerable to tariffs, is helping to fuel a re-balancing.
“Market-friendly rhetoric from Beijing provides a more favorable backdrop for Asian stocks today, and the news of increased investment from the likes of Mr. Warren Buffett will certainly help to a degree,” said Homin Lee, senior macro strategist at Lombard Odier. “While the nervous wait for Mr. Trump’s additional trade restrictions and export controls continue,” strong inflows into Hong Kong from mainland buyers will anchor sentiment, he added.
Gold climbed to touch a fresh all-time high above $3,000 an ounce. US assets traded in a tight range with the yield on 10-year Treasuries slipping by one basis point while the Bloomberg Dollar Index gained by 0.2%. US equity futures retreated in Asia after the S&P 500 Index closed up 0.6%.
China’s world-beating stock rally may get a fresh catalyst from a slew of tech earnings, with Xiaomi Corp. and Tencent Holdings Ltd. set to report this week. BYD’s tech advancement also reinforces a narrative of the global competitiveness of Chinese companies.
President Trump said Chinese leader Xi Jinping would visit Washington soon, amid brewing trade tensions between the world’s two largest economies.
In Japan, financial stocks also gained along with elevated yields ahead of the Bank of Japan’s decision on Wednesday. The central bank is expected to keep the policy rate at 0.5%, according to economists surveyed by Bloomberg. The yen dropped for a third day, inching toward the 150 mark again.
“The BOJ must be closely watching steep gains in yields,” said Junki Iwahashi, senior economist at Sumitomo Mitsui Trust Bank. “So close attention will be warranted on Ueda’s comments about that when he speaks at the briefing,” he said, referring to the BOJ governor.
Retail Sales
US retail sales rose by less than forecast in February and the prior month was revised lower. However, the so-called control-group sales — which feed into the government’s calculation of goods spending for gross domestic product — increased 1% last month, reversing the previous drop.
“While recession chatters may seem overblown for now, the US economy remains on a slowing trajectory, keeping valuations under close scrutiny” said Jun Rong Yeap, a market strategist at IG Asia.
A sense of wait-and-see may emerge from policymakers this week, in their first assessment of how Trump’s trade policies are impacting the economy. With Fed officials expected to hold rates steady on Wednesday, the market will focus on officials’ updated economic projections and Chair Jerome Powell’s press conference for clues on the path ahead.
In commodities, oil rose for a third day as escalating tensions in the Middle East overshadowed concerns about a potential global glut.
Key events this week:
US housing starts, import price index, industrial production, Tuesday
Bank of Japan rate decision, Wednesday
Federal Reserve rate decision, Wednesday
China loan prime rates, Thursday
Bank of England rate decision, Thursday
US Philadelphia Fed factory index, jobless claims, existing home sales, Thursday
Eurozone consumer confidence, Friday
Fed’s John Williams speaks, Friday
Some of the main moves in markets:
Stocks
S&P 500 futures fell 0.3% as of 12:24 p.m. Tokyo time
Japan’s Topix rose 1.4%
Australia’s S&P/ASX 200 was little changed
Hong Kong’s Hang Seng rose 2%
The Shanghai Composite rose 0.1%
Euro Stoxx 50 futures rose 0.3%
Currencies
The Bloomberg Dollar Spot Index rose 0.2%
The euro fell 0.1% to $1.0908
The Japanese yen fell 0.3% to 149.72 per dollar
The offshore yuan fell 0.1% to 7.2361 per dollar
Cryptocurrencies
Bitcoin fell 0.8% to $83,273.98
Ether fell 1.5% to $1,906.69
Bonds
The yield on 10-year Treasuries declined one basis point to 4.29%
Japan’s 10-year yield was unchanged at 1.510%
Australia’s 10-year yield declined one basis point to 4.39%
Commodities
West Texas Intermediate crude rose 0.3% to $67.78 a barrel
Spot gold rose 0.5% to $3,014.15 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Winnie Hsu.
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