Mostly higher inventories; RBA hikes interest rates

The Reserve Bank of Australia building in Sydney, Australia, Monday, September 6, 2021.

David Gray | Bloomberg | Getty Images

Asia-Pacific stocks traded generally higher Tuesday as Australia’s central bank raised interest rates again.

Mainland China’s Shanghai Composite gained 1.36% to 3,243.56 and the Shenzhen Component rose 1.037% to 11,799.81 after authorities signaled increased economic support.

The Japanese Nikkei 225 was roughly flat at 27,626.51, and the Topix index was down 0.11% at 1,926.58. The Japanese yen weakened sharply and hit a 24-year high. It last changed hands at 141.55 to the dollar.

The Hang Seng Index in Hong Kong was trading roughly flat over the past hour of trading.

South Korea’s Kospi rose 0.26% to 2,410.02 and the Kosdaq gained 1.04% to 779.46.

In Australia, the S&P/ASX 200 pared gains to close down 0.38% at 6,826.50.

The Reserve Bank of Australia raised rates by half a point to 2.35%, as expected by analysts polled by Reuters. The Aussie dollar weakened and last traded at $0.6779 following the move.

MSCI’s broadest index of Asia-Pacific stocks outside of Japan was roughly flat.

On Monday, the People’s Bank of China announced it would reduce the required foreign exchange reserve ratio, or the amount of foreign exchange reserves that financial institutions must hold, to improve financial institutions’ ability to use foreign currency funds. .

From September 15, the RRR will be 6%, compared to 8% previously.

“This reduction should help increase FX liquidity and therefore reduce CNY depreciation pressure. Although the actual impact on FX liquidity is small…this reduction serves as a strong policy signal that the PBOC is not is not comfortable with the rapid depreciation of the currency,” Goldman Sachs Economics Research analysts wrote in a note late Monday.

On Tuesday, the PBOC pegged the midpoint of the yuan against the dollar at 6.9096, the weakest since Aug. 25, 2020, according to Wind Information.

US markets were closed overnight for a holiday.

In oil markets, US crude extended its gains from the previous session, while Brent crude edged lower.

– CNBC’s Evelyn Cheng contributed reporting.

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