Asia report: Most markets higher, RBA keeps rates on hold

Most markets in Asia closed higher on Tuesday, as central bankers in Australia stood pat on record-low interest rates, and Covid-19 emergency measures were set to be extended in Japan.

In Japan, the Nikkei 225 was up 0.97% at 28,362.17, as the yen weakened 0.06% against the dollar to last trade at JPY 104.99.

Uniqlo owner Fast Retailing slipped 0.01%, while among the benchmark’s other major components, robotics specialist Fanuc was up 1.5% and technology giant SoftBank Group was 1.21% firmer.

The broader Topix index was ahead 0.94% by the end of trading in Tokyo, closing at 1,847.02.

Local media reported during the day that the country’s government was preparing to extend the Covid-19 state of emergency in Tokyo and surrounding areas until 7 March at this stage.

On the mainland, the Shanghai Composite added 0.81% to 3,533.68, and the smaller, technology-centric Shenzhen Composite jumped 1.66% to 2,401.65.

South Korea’s Kospi was up 1.32% at 3,096.81, while the Hang Seng Index in Hong Kong was 1.23% firmer at 29,298.70.

The blue-chip technology stocks were higher in Seoul, with Samsung Electronics up 1.69% and SK Hynix advancing 4%.

Oil prices were higher as the region went to bed, with Brent crude last 2.22% higher at $57.60 per barrel, and West Texas Intermediate rising 2.32% at $54.79.

In Australia, the S&P/ASX 200 advanced 1.49% to 6,762.60, as the Reserve Bank of Australia sated market expectations and kept its cash rate on hold at a record low of 0.1%.

The central bank also said it would purchase another AUD 100bn worth of bonds.

“The board will not increase the cash rate until actual inflation is sustainably within the two to three percent target range,” said the bank’s governor Philip Lowe.

“For this to occur, wages growth will have to be materially higher than it is currently.”

Lowe said that would require significant gains in employment and a return to a tight labour market.

“The board does not expect these conditions to be met until 2024 at the earliest.”

CMC Markets analyst David Madden said the moves higher for equities in Asia were up on the back of the bullish move seen in the US overnight.

“As expected, the Reserve Bank of Australia kept interest rates at 0.1%, [and] the central bank extended its bond buying scheme by AUD 100bn,” he said.

“The RBA predicts that interest rates won’t be raised until 2024 at the earliest, which put pressure on the CMC AUD Index.”

Across the Tasman Sea, New Zealand’s S&P/NZX 50 went in the opposite direction to its regional peers, falling 0.4% to 13,044.50.

The down under dollars were in a mixed state against the greenback, with the Aussie last 0.11% weaker at AUD 1.3137, while the Kiwi strengthened 0.16% to NZD 1.3948.