Asian Markets Rise After Messages from Chinese President

On Asian stock exchanges on Tuesday, share prices rose, while the dollar strengthened against the yen as fears of a trade war between the U.S. and China subsided following messages from Chinese President Xi Jinping.

The MSCI Asia-Pacific index, excluding Japan, was up 0.7 percent around 7:00 AM.

At the same time, the Nikkei index on the Tokyo Stock Exchange strengthened by 0.7 percent, while share prices in South Korea, Shanghai, Australia, and Hong Kong rose between 0.2 and 1.1 percent.

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At the very beginning of today’s trading, most of these indices were in the red, but share prices significantly increased after President Xi announced at an economic conference that China would reduce import tariffs on certain products, including automobiles.

He also stated that China would allow greater access for foreign investors to markets, reduce restrictions on foreign ownership in the automotive sector, and protect the intellectual property of foreign companies.

This encouraged investors in capital markets that had been under pressure in recent weeks due to fears of a trade war between the U.S. and China, which could harm global economic growth.

“Xi’s comments covered all the important issues raised by Washington, including intellectual property and the liberalization of the domestic market. Xi has returned the ball to the American court, but it seems that China has laid the groundwork for reaching an agreement with the U.S.,” says Yoshinori Shigemi, a strategist at JPMorgan Asset Management.

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Thanks to this, the futures S&P 500 index jumped about 1 percent this morning, indicating a rise in stock prices on Wall Street this afternoon.

And in the currency markets, thanks to the recovery of the stock market, the exchange rates of currencies considered safer havens for capital in uncertain times, such as the Japanese yen, fell.

Thus, the dollar’s exchange rate against the Japanese currency reached 107.15 yen, while yesterday at this time it was 107.00 yen.

However, the American currency weakened against the European one, so the price of the euro reached 1.2315 dollars, while yesterday at this time it was 1.2275 dollars.

The dollar index, which shows the value of the dollar against six major world currencies, slid from yesterday’s 90.18 to 89.88 points.