Asian markets rebounded Thursday with the help of central bankers around the globe and encouraging signs from China, where volatility in stocks dropped off significantly from previous sessions.
In Japan, the Nikkei 225 index gained 197.61 points, or 1.1%, to 18,574.44, following on the heels of Wednesday’s 500-point improvement.
The Japanese yen is roughly flat against the U.S. dollar at ¥120.05 from late Wednesday in Asia. The currency has also strengthened by 1.7% week to date amid investor nervousness.
In Hong Kong, the Hang Seng Index bounced back from days of heavy losses, growing 758.15 points, or 3.6%, to 21,838.54
The start of a global recovery Wednesday picked up pace in Asia after reassuring comments from central bankers and positive U.S. economic data. U.S. stocks snapped a six-day losing streak fueled by worries that a slowing Chinese economy would weigh on the rest of the world. In that time, more than $2 trillion U.S. in market capitalization was wiped out from U.S. stocks.
Comments from Federal Reserve Bank of New York President William Dudley calmed fears that the central bank would raise interest rates as soon as September. He said the case for a move next month has grown "less compelling" given the turmoil in markets around the world, which helped ease concerns about another immediate trigger for further stress.
On Thursday, currencies that investors sold off amid China’s turmoil found sturdier footing.
Currencies that had hit multiyear lows earlier in the week — such as the Singaporean dollar and Australian dollar— stabilized on Thursday.
Despite U.S. central bankers’ soothing words, uncertain timing for a rate increase still looms. Bank of Japan Governor Haruhiko Kuroda said Thursday that a rise, whenever it happens, would be a welcome development for the world economy. Indonesia’s finance minister, Bambang Brodjonegoro, said the U.S. should move quickly to reduce speculation and ambiguity.
But while a rate increase would be a vote of confidence in the strength of the U.S. economy, it is also expected to attract money flows from emerging markets back to higher yielding assets in the U.S.
CHINA
In China, the CSI 300 regained 179.95 points, or 6%, to 3,205.64
Worries that a slowdown in China would eat into demand for exports rattled these currencies after a surprise devaluation of the yuan by Beijing two weeks ago. Beijing’s move fueled expectations that a weaker yuan might give China an edge over its exporting neighbors.
In other markets
In Korea, the Kospi index gained 13.91 points, or 0.7%, to 1,908
In Singapore, the Straits Times Index rebounded 72.43 points, or 2.5%, to 2,945.43
In Taiwan, the Taiex index added 108.96 points, or 1.4%, to 7,824.55
The NZX 50 recovered 57.17 points, or 1%, to 5,634.94
The ASX 200 Index hiked 60.55 points, or 1.2%, to 5,233.32
