Asian equities advanced, helped by an encouraging start to U.S. earnings season, while Chinese bonds rallied after the nation’s central bank moved to support liquidity. The yen dipped amid a summit between U.S. President Donald Trump and Japanese Prime Minister Shinzo Abe.
Stocks gained in Japan, Australia and South Korea. China’s automakers declined after its government moved to allow foreign players take full ownership of their local ventures. The country’s 10-year bond yield fell the most since June after the People’s Bank of China cut the reserve requirement ratio for banks, part of its efforts to support credit amid a crackdown on shadow lending. The yen dropped on early signs that the Trump-Abe summit won’t see new trade demands from the U.S., reducing risk concerns.
With earnings season ramping up, corporate fundamentals are for now overshadowing renewed machinations on the trade front, where China retaliated for the U.S.’s hit on ZTE Corp. with agricultural duties. The S&P 500 Index climbed to the highest in four weeks.
Investor sentiment got a boost from geopolitics, with Trump saying the U.S. and North Korea have already started direct talks at “extremely high levels” in advance of a planned meeting between the two nations’ leaders this summer. — Bloomberg