By Hideyuki Sano
TOKYO (Reuters) – Asian stocks have advanced to 4-1 / 2-month highs on Wednesday as investors bet Chinese and US trading dealers would be able to secure an agreement to de-escalate its year-long wage war.
MSCI's broadest index of Asia-Pacific stocks outside Japan rose nearly 1
Hong Kong increased 1.1 percent to six months, while Korea's Kospi and Taiwan's index recovered to levels last seen in early October. Japan's acquisition rose 0.75 percent to two months.
Chinese stocks rose 0.4 percent and expanded their gains to 18 percent from January 4, thanks to the influx of foreign funds.
The gains in Asia peaked in Tuesday's Wall Street session, where they achieved 0.15 percent, aided by positive results from Walmart (NYSE :). Nasdaq rose by 0.19 percent, and logged its seventh straight increase gain.
U.S. President Donald Trump said Tuesday that trade negotiations with China went well and suggested he was open to pushing the deadline to complete negotiations and said that March 1 was not a "magical" date.
U.S. Tariffs of $ 200 billion of Chinese imports are now scheduled to rise to 25 percent from 10 percent if no trade agreement is signed by March 1.
Investors now expect Trump to meet Chinese President Xi Jinping next month, probably after China's annual congressional meeting from March 5, to enter into an agreement or secure a "memorandum of understanding".
"They will probably agree that China is importing a larger quantity and agricultural products," said Nobuhiko Kuramochi, chief strategist at Mizuho Securities, adding that China will also "open up some of its domestic financial services and possibly some industrial sectors" .
But he predicted China "will not compromise on so-called structural problems. The two countries may agree to set up a body to continue discussing these issues. Markets are already in the midst of pricing in these things."
The two countries launched a new round of negotiations to resolve their trade crisis on Tuesday, and higher-level rallies are scheduled later this week, with Chinese Vice President Liu He visiting Washington on Thursday and Friday.
KEEP FAT & TURNAROUND
Investors also look at the release later Wednesday in minutes from the Federal Reserve's policy-making meeting, where politicians signaled without further interest rate increases and possible adjustments to balance normalization.
New York Fed President John Williams (NYSE 🙂 told Reuters that he was comfortable with the level of US interest rates now and that he does not need to increase them again, unless economic growth or inflation changes to an unexpectedly higher yield.
But he also suggested the balance will continue at least next year at its current pace, curbing speculation that the Fed could end the process this year.
In the foreign exchange market, the EU strengthened to $ 1.1350, bouncing back from Friday's three-month low of $ 1.134, on the back of improving risk units.
The dollar rose 0.2 percent to 110.80 yen, edged near Thursday's seven-week peak at 111.13.
The British pound rose to $ 1.3063 on Tuesday, gaining 1.09 percent, a move some traders attributed to rising hopes. Prime Minister Theresa May will make progress in seeking changes to her Brexit agreement with the EU. The last one stood at $ 1.3070.
Rose rose above 0.5 percent to 6.7243 per dollar, the highest level in about three weeks after Bloomberg reported Tuesday that the US was trying to secure a promise from China that it would not devalue its yuan currency as part of a trade agreement.
Yuan's strength also strengthened bid for Asian currencies, with the Thai baht beating five-year highs.
Oil prices fluctuated near 2019 altitudes, backed by OPEC-led supply cuts and US sanctions against Iran and Venezuela, but further gains were curtailed by heavy US production and expectations of economic downturn.
US West Texas Intermediate (WTI) futures were $ 56.01 a barrel, down 8 cents from their last settlement, but not far from 2019 high of $ 56.33 achieved earlier this week.
International futures stood at $ 66.33 a barrel, having hit three months high at $ 66.83 per barrel earlier this week.
Gold rose 0.4 percent to 10-month highs of $ 1,346.50, and expanded its rally partly due to signs of world central banks turning.
The yellow metal has also attracted security burdens on concerns about Brexit, says Tatsufumi Okoshi, senior trade economist at Nomura Securities.
Palladium rose 1.4 percent to yet another record high, and has increased by 19 percent so far this year, on expectations of increased demand due to stricter emission standards.