SINGAPORE — Asia-Pacific stocks were mixed in trading on Thursday as investors continue to monitor China’s Covid situation along with movements in the Japanese yen.
Chinese equities led regional losses, with the Shanghai Composite slipping 1.6% while the Shenzhen component fell 1.894%. Hong Kong’s Hang Seng Index slipped 1.65%.
Investors are watching for signs of political support from Chinese authorities as the mainland continues to grapple with its worst Covid wave since the first outbreak in 2020. Its strict zero-Covid policy has raised questions about China’s economic prospects.
China remains “well positioned to continue spurring growth,” especially if inflation is “not a real issue” in the country right now, said Thomas Rupf, head of trading execution and chief investment officer Asia at VP Bank in Singapore.
“Clearly the main priority now is on the Covid side,” Rupf told CNBC’s Squawk Box Asia on Thursday. “We expect more targeted measures on the infrastructure side in the next few months and they still have room to reduce rates slightly.”
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The Nikkei 225 in Japan gained 1.23%, while the Topix index gained 0.61%. South Korea’s Kospi rose 0.43%.
In Australia, the S&P/ASX 200 rose 0.34%.
MSCI’s broadest index of Asia Pacific stocks outside of Japan lost 0.56%.
Wall Street stocks shuffled overnight. The Dow Jones Industrial Average rose 249.59 points, or 0.71%, to 35,160.79. The S&P 500 fell marginally to 4,459.45, while the tech-heavy Nasdaq Composite lagged, falling 1.22% to around 13,453.07.
yen clock
The Japanese yen traded at 128.46 per dollar after recovering from levels above 129 against the greenback yesterday.
Still, the Japanese currency remains weaker compared to below 126 levels recorded against the dollar last week. The yen has struggled against the dollar for weeks as the Bank of Japan is expected to normalize monetary policy at a slower pace than the US Federal Reserve.
“Buying on dips will remain the theme as long as the Fed maintains its hawkish rhetoric and the BOJ continues its unlimited asset purchases,” Frances Cheung and Terence Wu of OCBC Treasury Research wrote in a note Thursday.
The US Dollar Index, which tracks the greenback against a basket of its peers, came in at 100.54 after falling from around 101 recently.
The Australian dollar changed hands at $0.743, still higher than levels below $0.736 recorded earlier this week.
Oil prices were higher in the morning of the Asian session, with international benchmark Brent crude futures up 1.03% to $107.90 a barrel. US crude futures were up 0.91% to $103.12 a barrel.