Asian stocks closed higher on Monday on fading risk aversion as the dollar clawed back losses. Markets also digested headlines concerning developments out of the People's Bank of China and European Central Bank announced at the weekend.
In Japan, the Nikkei 225 index roared ahead 270.95 points, or 1.4%, to end the first session of the week at 19,545.77,
The Hang Seng Index jumped 286.66 points, or 1%, to 27,955.13
The rally took place after no North Korean missile launches materialized on Sept. 9, the anniversary of the country's founding. There had been speculation in the lead up to the weekend that North Korea could conduct its next missile test then to celebrate the occasion.
In corporate news, South Korean automakers Hyundai Motor and Kia Motors said they were likely to miss their 2017 sales targets, Yonhap reported on Sunday. South Korean exporters have been hit due to a diplomatic tiff with China over the deployment of an anti-missile defense system. Hyundai and Kia shares erased gains seen earlier in the session to close down 0.4% and 0.6% respectively.
Also in South Korea, retailer Lotte Shopping could potentially sell its supermarket outlets in China depending on the state of bilateral relations between the two countries. Shares of Lotte Shopping closed higher by 2.2%.
Down Under, indices rose, with the information technology sub-index leading gains.
Against the Japanese currency, the U.S. dollar rose more than 0.6% to fetch 108.52 yen after plumbing a low of 107.31 in the last session.
The dollar stayed firm after the release of Japan July core machinery orders, which showed an increase of 8% from June. The rise in core orders was the first in four months,
CHINA
The CSI 300 fell 0.34 points to 3,825.65
China's central bank, the People's Bank of China, intends to ease requirements for financial institutions to set aside foreign-exchange risk reserves for trading yuan forwards as of Sept. 11
The move comes as the Chinese currency recently erased its entire decline from 2016. The PBOC on Monday set the yuan mid-point at 6.4997 a dollar, the first time the reference point has been set below the 6.5 level since May 2016. The PBOC lets the yuan spot rate against the U.S. dollar rise or fall a maximum of 2% from the fixing rate.
The on-shore yuan traded at 6.5171 to the U.S. dollar at the end of the trading session on Friday. The offshore yuan was a touch softer at 6.5288.
China August producer price inflation rose 6.3%, compared with a year earlier. That was above the 5.6% rise forecast by analysts and the 5.5% increase seen in July.
In other markets
In Taiwan, the Taiex index dropped 37.79 points, or 0.4%, to 10,572.16
In Korea, the Kospi index recovered 15.36 points, or 0.7%, to 2,359.08
In Singapore, the Straits Times Index dipped 0.05 points to 3,228.51
In New Zealand, the NZX 50 nicked up 0.23 points to 7,851.75
In Australia, the ASX 200 advanced 40.53 points, or 0.7%, to 5,713.15
