(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. US equity futures retreated after the S&P 500 Index closed up 0.6%.
Global investors are hunting for opportunities elsewhere after US stocks tipped into a correction earlier this month, with Chinese and Japanese equities among the beneficiaries. A pivot by China toward stoking domestic consumption in 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 continues,” 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 one basis point to 4.29% as the Federal Reserve is set to kick off a two-day policy meeting. The Bloomberg Dollar Index gained 0.1%.
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 against the dollar 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.
Elsewhere, trading in Indonesian stocks was halted following a 5% tumble in the benchmark gauge, amid concerns about the economy and weaker spending ahead of the Eid holiday.
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:
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US housing starts, import price index, industrial production, Tuesday
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Bank of Japan rate decision, Wednesday
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Federal Reserve rate decision, Wednesday
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China loan prime rates, Thursday
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Bank of England rate decision, Thursday
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US Philadelphia Fed factory index, jobless claims, existing home sales, Thursday
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Eurozone consumer confidence, Friday
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Fed’s John Williams speaks, Friday
Some of the main moves in markets:
Stocks
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S&P 500 futures fell 0.3% as of 1:23 p.m. Tokyo time
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Japan’s Topix rose 1.6%
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Australia’s S&P/ASX 200 rose 0.1%
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Hong Kong’s Hang Seng rose 1.8%
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The Shanghai Composite was little changed
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Euro Stoxx 50 futures rose 0.4%
Currencies
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The Bloomberg Dollar Spot Index rose 0.1%
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The euro fell 0.1% to $1.0910
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The Japanese yen fell 0.3% to 149.64 per dollar
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The offshore yuan fell 0.1% to 7.2349 per dollar
Cryptocurrencies
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Bitcoin fell 1% to $83,148.95
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Ether fell 1.5% to $1,905.43
Bonds
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The yield on 10-year Treasuries declined two basis points to 4.28%
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Japan’s 10-year yield was unchanged at 1.500%
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Australia’s 10-year yield declined two basis points to 4.39%
Commodities
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Winnie Hsu.
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