(Bloomberg) — Asian stocks were mostly higher after a mixed start Wednesday, as investors weigh hopes for economic recovery against deepening U.S.-China strains. The yuan retreated.
Japanese shares led gains, with news on plans for a second fiscal-stimulus package giving fresh encouragement for bulls. Futures on the S&P 500 gained, after the index closed at an 11-week high. Jamie Dimon, head of America’s biggest bank, counted himself among the optimists Tuesday, saying there could be a “fairly rapid recovery.” China’s onshore and offshore yuan slipped to the lowest in about eight months in wake of the latest Sino-American flare-up.
The S&P 500 gave up almost half its gains in the final half hour of trading Tuesday after a report that the Trump administration is considering sanctions on Chinese officials. The Treasury Department could impose controls on transactions and freeze assets of Chinese officials and businesses for implementing a new national security law that could curtail the rights and freedoms of Hong Kong citizens, Bloomberg reported.
Japanese equities hit their high of the session after Bloomberg reported that the Abe administration is compiling a new stimulus package of 117.1 trillion yen ($1 trillion), including 31.9 trillion yen of spending.
The recent equity rally “is an indication that investors are getting optimistic about the reopening of the economy and the drug-treatment development,” Katerina Simonetti, senior portfolio manager at UBS Private Wealth, said on Bloomberg TV. “We hope that it will eventually lead to a normalization in the market, but we have to keep an eye on the re-emergence of virus cases.”
Elsewhere, crude oil retreated and gold was steady.
Here are some key events coming up:
Thursday brings the U.S. jobless claims reading for the week ended May 23.Federal Reserve Chairman Jerome Powell participates in a virtual discussion on Friday.
These are the main moves in markets:
Stocks
Futures on the S&P 500 Index rose 0.7% as of 12:46 p.m. in Tokyo. The index added 1.2% on Tuesday.Japan’s Topix index added 0.8%.South Korea’s Kospi index rose 0.3%.Australia’s S&P/ASX 200 Index gained 0.9%.Hang Seng Index slid 0.3%.Shanghai Composite was little changed.Euro Stoxx 50 futures added 0.2%.
Currencies
The yen was little changed at 107.51 per dollar.The offshore yuan fell 0.3% to 7.1644 per dollar.The euro slipped 0.2% to $1.0964.
Bonds
The yield on 10-year Treasuries was little changed at 0.70%.Australian 10-year yields was little changed at 0.89%.
Commodities
West Texas Intermediate crude dipped 0.2% to $34.28 a barrel.Gold was at $1,7110 an ounce.
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