Asian markets mostly rose Thursday as regional investors began to return from their Lunar New Year break, though Tokyo edged lower after a negative lead from Wall Street. Most trading floors have reopened but business remains light, with Hong Kong and Shanghai still closed, while focus turns on the resumption next week of China-US trade talks in Beijing. The two sides will try to hammer out a deal to resolve their long-running tariffs row, with markets broadly hopeful just three weeks before a deadline that will see the US more than double levies on hundreds of billions worth of Chinese goods. Donald Trump has said he plans to meet his Chinese counterpart Xi Jinping before the end of the month to put the finishing touches to any deal, which would be in both countries' interest as the global economy begins to wobble.
In morning trade Sydney climbed more than one per cent and Wellington put on 0.8 per cent with investors cheered by the prospect of an extended period of low interest rates. Seoul edged up 0.2 per cent and Singapore put on 0.6 per cent with Manila and Jakarta also up. However, Tokyo fell 0.7 per cent by the break despite a 17 per cent surge in SoftBank, its biggest rise in a decade, fuelled by news of a USD 5.5 billion share buyback using cash from last month's listing of its mobile phone unit. On currency markets the New Zealand dollar tanked more than one per cent on the back of weak jobs data while the Australian dollar extended Wednesday's sell-off that was fuelled by comments from the country's top central banker hinting interest rates would not rise any time soon.
Analysts pointed to the units' correlation to China's economy, which is stuttering at the moment, uncertainty on Wall Street and nervousness ahead of the trade talks. Dealers are also looking ahead to the Bank of England's latest policy meeting later in the day, which comes as the government struggles to push through its Brexit plan and concerns build that the country will leave the EU without a deal on March 29. It also follows a number of dovish statements from central banks around the world as their boards grow increasingly worried about the global economic outlook.
BoE boss Mark Carney "has been quite vocally Brexit's Angel of Death and an uber-dove for quite some time, but with central banks shifting policy stance around the world, tonight's BoE rate decision and Carney's missives could have a real impact on the pound", said OANDA senior market analyst Jeffrey Halley. The pound has weakened more than two per cent against the greenback in the past 12 days as investors grow increasingly worried about a so-called hard Brexit.