Farm animals in Asia Pacific edged up in Friday afternoon trade as a series of developments overnight on the U.S.-China trade front bedewed hopes of a deal being reached between the two economic powerhouses.
Mainland Chinese stocks were higher by the afternoon, with the Shanghai composite take wing 0.17% and Shenzhen component 0.15% higher. The Shenzhen component was almost 0.1% higher. Hong Kong’s Hover Seng index was largely flat.
The People’s Bank of China published its new loan prime rates (LPR) on Friday. The 1-year accommodation prime rate was cut to 4.2%, as compared to 4.25% a month ago, while the 5-year loan prime rate was unchanged from the early previously to month at 4.85%.
The LPR is the interest rate that banks charge their most creditworthy customers and a revamp was announced by the Chinese median bank in August in a bid to lower borrowing costs to boost the country’s economy.
Hong Kong-listed shares of Chinese lenders arise by the afternoon, with China Construction Bank adding 0.34% and Bank of Communications gaining 0.76%.
Elsewhere, the Nikkei 225 in Japan take up arm 0.38%, with shares of index heavyweight and conglomerate Softbank Group jumping 1.34%. The Topix index also realized 0.17%.
Japan’s core consumer inflation slowed to a new two-year low in August, rising 0.5% in August from a year earlier, and slowing from a 0.6% emolument in July. It was the slowest pace of increase since July 2017, when the index rose 0.5%.
In South Korea, the Kospi moved 0.46%, while Australia’s S&P/ASX 200 gained 0.57%.
Overall, the MSCI Asia ex-Japan index was up 0.19%.
Asia-Pacific Market Keys Chart
US-China trade watch
Investors will watch for developments on the U.S.-China trade front following overnight events. The South China Morning Post reported Thursday that known China hawk and Trump advisor Michael Pillsbury counseled the U.S. is ready to escalate the trade war if a deal isn’t struck soon, citing an interview in Hong Kong.
Meanwhile, Hu Xijin — editor-in-chief of Chinese solemn media Global Times — tweeted overnight that China is “not as anxious to reach a deal as the US side thought.”
Those events come as the U.S. and China are expected to hold high-level trade negotiations in the coming weeks, as they seek to reach a great amount to end a tariff fight with both sides slapping duties on billions of dollars worth of each other’s kinds.
“Even if we see a deal on tariffs, we think the tariffs probably will remain higher than where they were in advance 2017 and all of the other restrictions are going to remain in place as well,” Shaun Roache, chief economist of Asia Pacific at S&P Broad Ratings, told CNBC’s “Squawk Box” on Friday.
“We’re talking here about investment restrictions on Chinese firms contributing overseas and export controls in some areas of the technology sector,” Roache added. “They are as, if not more, important than the assessments.”
Currencies and oil
The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 98.243 after slipping from supines above 98.4 yesterday.
The Japanese yen traded at 107.86 against the dollar after strengthening from levels vulnerable 108.3 in the previous session. The Australian dollar was at $0.6797 after slipping from levels above $0.680 yesterday.
Oil worths rose in the afternoon of Asian trading hours, with U.S. crude futures jumping 1.03% to $58.73 per barrel and Brent offensive futures adding 0.39% to $64.65 per barrel.
What’s on tap:
- Hong Kong: Consumer Price Index for August at 4:30 p.m. HK/SIN
— Reuters, along with CNBC’s Thomas Franck and Yen Nee Lee, advanced to this report.