Asian stocks rebounded from a six-week low as Japanese shares climbed after the yen weakened and investors snapped up beaten-down Chinese equities traded in Hong Kong.
The MSCI Asia Pacific Index added 0.3 percent to 125.76 as of 4:11pm in Hong Kong, after earlier falling as much as 0.2 percent. The measure was little changed for the week after three weeks of losses.
About US$900 billion was wiped off the value of global shares over the last three days as traders stepped up bets on an interest rate increase next month in the US, spurred by comments from US Federal Reserve officials, minutes of the last policy meeting and quickening inflation.
While the US economy shows signs of being able to weather higher borrowing costs, the outlook for global growth has been worsening and finance chiefs from the G7 nations are meeting in Japan on May 20 and May 21 to discuss ways to tackle this.
“Everyone just has to bite the bullet and realize that rates have to go up,” said James Audiss, Sydney-based senior investment adviser at Shaw and Partners, which manages about A$10 billion (US$7.2 billion). “Earnings are coming out OK, forward guidance wasn’t too bad and the US economy is doing better. That’s all supportive for the market.”
It has been a tumultuous year for investors in Asia-Pacific equities. The regional index began the year with a 14 percent slump through a February low on concern a devaluation of the yuan would curb global growth and amid prospects for a US rate increase. It then rallied almost 20 percent through this year’s peak last month, before retreating again.
Some Fed policymakers expressed concern that markets were ill-prepared for a rate increase next month, minutes of the central bank’s meeting last monthshowed this week. The document also indicated policymakers’ willingness to raise interest rates next month if the economy continues to improve.
New York Fed President William Dudley on Thursday said the central bank is moving closer to raising rates at one of its next two meetings and that this message is getting through to financial markets is welcome news.
The TAIEX rose 0.44 percent to 8,131.26 on Friday, down from 8,053.69 on Friday last week. President Tsai Ing-wen (蔡英文) was inaugurated on Friday.
Tsai said she would seek peaceful ties with China, while resisting pressure from Beijing to acknowledge the idea that they are part of a single nation.
Japan’s TOPIX rose 0.5 percent, bringing its gain for the week to 1.8 percent. The index closed at the highest level since April 27, as investors anticipated a potential US rate increase next month would lead to a weaker yen, aiding exporters.
Australia’s S&P/ASX 200 Index climbed 0.5 percent with volume down 18 percent. New Zealand’s S&P/NZX 50 Index added 0.1 percent. South Korea’s KOSPI was little changed. Singapore’s Straits Times Index added 0.9 percent.
The Hang Seng China Enterprises Index rose 0.7 percent to erase a weekly loss.
Additional reporting by staff writer
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