A steadying yuan has sharpened focus on the timing of a rise in U.S. interest rates, renewing pressure on Asian markets Monday, although hopes for stimulus from Japan offset some losses.
In Japan, the Nikkei 225 index regained 100.81 points, or 0.5%, to 20,620.26 after disappointing growth sparked hopes of government easing.
Earlier Monday, the country reported that second-quarter growth contracted as households crimped spending and demand dwindled for Japanese goods overseas. Gross domestic product shrank 1.6% on an annualized basis in the April to June quarter.
In Hong Kong, the Hang Seng Index dropped 176.38 points, or 0.7%, to 23,814.65
In Japan, SoftBank Group Corp. shares fell 1.1%, after Soros Fund Management, led by George Soros, sold off most of its stake in Chinese Internet retailer Alibaba Group Holding Ltd., which trades in the U.S. Soros sold 4.39 million Alibaba shares, leaving the fund with just 59,320 shares in the company. SoftBank holds around a 32% stake in Alibaba.
Two days of stability in the yuan and improving U.S. economic data firmed expectations that the Federal Reserve wouldn’t change course on rising interest rates because of volatility sparked by the currency’s devaluation. That dealt a fresh blow to some regional stock markets and currencies, which briefly had found more secure footing after the devaluation dust had settled.
Currencies of regional exporters that compete with China or send goods there continued to slide even as investors’ focus returned to the Fed.
South Korea’s won was down 0.4% to trade at 1181.15 against the U.S. dollar
The prospect of more attractive returns in the U.S. could attract money flows away from risker assets in emerging markets, including in Asia. Minutes released on Wednesday from the Fed’s latest meeting could offer some clues.
The U.S. dollar gained 0.2% against the Japanese yen.
In corporate news, shares of Hong Kong-listed Lerado Group (Holding) Co plunged 23.4%, after the toys and medical products maker announced a share sale at deep discount.
CHINA
Meanwhile, China’s main stock index has remained relatively resilient through the volatility that followed the yuan’s devaluation.
In China, the CSI 300 eked up 4.33 points, or 0.1%, to 4,077.87
On Monday, Beijing set the yuan’s fixing at a slightly stronger 6.3969 compared with Friday’s level. The onshore yuan, which is allowed to rise and fall within 2% of its daily fixing, was at 6.3943 against the U.S. dollar.
China’s Securities Regulator said Friday that China Securities Finance Corp., the government-backed company that bought shares during the market slump last month, won’t abandon its role of stabilizing the market in the coming years. It also said CSF had transferred some of the shares to Central Huijin, an investment arm of China’s sovereign-wealth fund.
In other markets
In Korea, the Kospi index returned from a long weekend to dump 14.94 points, or 0.8%, to 1,968.52
In Singapore, the Straits Times Index slouched 46.90 points, or 1.5%, to 3,067.35
In Taiwan, the Taiex index hurtled lower 92.22 points, or 1.1%, to 8,213.42
The NZX 50 gained 30.97 points, or 0.5%, to 5,727.42
The ASX 200 Index gained 11.12 points, or 0.2%, to 5,367.66
