- Asian Stocks Gain as Yen Falls, China Shares Rally
Stocks in Asia rose, with a weaker yen supporting Japanese equities and Hong Kong shares rallying following back-to-back weekly declines in the MSCI Asia Pacific Index.
Shares in Shanghai and Hong Kong jumped before a decision Tuesday on whether MSCI Inc. will include China shares in global indexes. The yen slumped against all its major peers. The kiwi climbed as a gauge of the services industry expanded at a faster pace. Oil continued to retreat, trading near the lowest level since November. Gold was little changed after two weeks of losses.
Global equities are climbing back after a technology-sector selloff weighed on stocks last week. Trading volumes were the highest since mid-March as poor housing data and a drop in consumer sentiment added to signs the American economy’s growth rate may be slower than forecast. That’s keeping bond yields down amid a subdued pace of inflation that’s sowed doubts about the Federal Reserve’s planned trajectory for monetary tightening.
There were more encouraging signs from Asian data on Monday, including New Zealand’s services report. Japan had a surprise trade deficit in May, as stronger-than-expected imports overpowered the continued growth in exports. Australian central bank Governor Philip Lowe said the country can achieve stronger growth if lawmakers can surmount current political gridlock. One weak spot was China, where home prices increased in fewer cities last month in the wake of cooling measures imposed by local authorities.
Political wrangling in Washington took another turn over the weekend. U.S. President Donald Trump isn’t under investigation by special counsel Robert Mueller, a member of the president’s legal team said, despite Trump’s repeated comments on social media that he’s the target of a “witch hunt.” “The president is not and has not been under investigation for obstruction,” attorney Jay Sekulow said on NBC’s “Meet the Press.”
On the agenda for markets this week: MSCI Inc. announces whether it approved Chinese-listed stocks in its global benchmarks. The $6.8 trillion onshore market is the world’s second-largest and accounts for 9 percent of global stock value, but has been rejected for index inclusion three times by MSCI over issues including capital controls and long trading halts. Morgan Stanley says odds of approval are just over 50 percent.