A falling yuan roiled markets across Asia this week, particularly in Malaysia and Indonesia, though much of the region steadied by Friday.
China shares, meanwhile, weathered the volatility that followed the yuan’s devaluation and closed out with their best weekly performance in over two months.
In Japan, the Nikkei 225 index surrendered 76.10 points, or 0.4%, to 20,519.45
In Hong Kong, the Hang Seng Index dropped 27.77 points, or 0.1%, to 23,991.03
The more stable yuan on Friday helped lift some of the week’s most bruised currencies, like the South Korean won, which ended flat to trade at 1,179.06 against the U.S. dollar from its level late Thursday in Asia, and the Australian dollar, which gained 0.4% to 73.85 U.S. cents.
CHINA
In China, the CSI 300 dipped 1.92 points, or 0.1%, to 4,073.54.
China’s surprise devaluation of its currency earlier this week both triggered fears about waning competitiveness of the region’s exporters and cast fresh doubt on the health of the world’s number-two economy, which has anchored growth in the region.
Uncertainty about the state of China’s economy even rippled overseas, pressuring markets in both Europe and the U.S.
Markets in Asia staged a relief rally Thursday and steadied Friday, when China’s yuan finished up 0.1% against the U.S. dollar. Earlier in the day, the central bank set a slightly stronger daily fixing, easing concerns that the currency was in free fall. Friday marks the currency’s first day of gains in three since Beijing started to let the market play a bigger role in determining the currency’s trading level.
The yuan is still controlled by Beijing—it must trade within a 2% band of where China’s central bank sets it against the dollar—but the band should set its fixing close to the yuan’s previous close going forward.
Mainland shares, which were mostly stable after China’s currency regime change, had popped on Monday when weak economic data drove expectations of further easing by policy makers. Investors were also encouraged by the prospect of further mergers among state-owned entities, a key part of President Xi Jinping’s promised reforms.
Shanghai ended the week up 5.9% while Shenzhen rose 6.1%, making them the best performers in the region.
In other markets
Markets in Korea were shuttered for holiday
In Singapore, the Straits Times Index gained 22.47 points, or 0.7%, to 3,114.25
In Taiwan, the Taiex index slipped 6.10 points, or 0.1%, to 8,305.64
The NZX 50 fell 41.25 points, or 0.7%, to 5,696.45
The ASX 200 Index faltered 31.33 points, or 0.6%, to 5,356.54
