World Economy

Asia Shares Shrug Off Losses

Asia Shares Shrug Off LossesAsia Shares Shrug Off Losses

Asian stocks erased early losses and edged up on Monday as Chinese inflation data fanned optimism Beijing will continue with loose monetary policies, while Japanese shares slid as the dollar notched a fresh 17-month low against the yen.

Financial spreadbetters expected subdued openings for European bourses, with Britain’s FTSE 100 seen down around 0.2%, Germany’s DAX expected to open down as much as 0.3%, and France’s CAC 40 seen opening 0.4% lower, Reuters reported.

MSCI’s broadest index of Asia-Pacific shares outside Japan added about 0.2%, after Wall Street ended with modest gains on Friday even as the S&P 500 still suffered its biggest weekly decline in two months.

Japan’s Nikkei stock index was off its session lows but still ended down 0.4%. In addition to a stronger currency, data released early on Monday showed Japan’s core machinery orders fell 9.2% in February from the previous month, in a sign that business investment remains subdued.

“While February’s machinery orders fell less than anticipated, Japan markets remain weighed down by a strengthening yen and uncertainty surrounding when, or if, the Bank of Japan will intervene,” said Andrew Meredith, co-managing director at Tyton Capital Advisors.

Chinese data released earlier on Monday showed that country’s consumer price inflation was less than expected in March, while wholesale prices declined less than anticipated, in a sign that deflationary pressure in the industrial sector may be easing.

 More China Stimulus?

While the figures pointed to stabilizing prices, they also underscored that the central bank’s prolonged easing campaign begun in late 2014 has yet to result in substantial price increases and raised hopes of more stimulus steps.

Chinese shares were higher, with the blue-chip CSI300 index up 1.7%, while the Shanghai Composite Index added 1.8%.

The greenback’s recent slide against the yen prompted a chorus of warnings from officials in Tokyo and put investors on alert for direct yen-selling intervention, though many believed Japan would stay its intervention hand.

The dollar index, which tracks the US unit against a basket of six major currencies, fell 0.1% to 94.136 , within sight of last week’s low of 94.01, which was its lowest since October.

The euro was up about 0.1% at $1.147, not far from last week’s high of $1.145, its highest since October.

The dollar slipped about 0.2% to 107.89 yen after earlier nudging down to 107.63, which was its weakest since October 2014.

The weaker dollar helped lift spot gold to its highest in nearly three weeks. Gold rose to $1,252.26 an ounce, its highest since March 22. It was last up about 0.7% at $1,249.11.