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South Korea leads gains while Australia holds on a target

In Tuesday trade, in Asia-Pacific, shares were mixed while the Australian central bank held its cash rate target firm.

South Korea’s Kospi surged by around 1.54%, leading gains among the major markets in the region as shares of Samsung Electronics bounced about 3.1%.

Hong Kong’s Hang Seng index remained around 0.67% higher, but it had pared gains before. Mainland Chinese stocks started to lower while the Shenzhen component decreased fractionally and slipped 0.62%.

On Monday, Japanese stocks surged but then started to slip. The Topix index fell 0.51%, while the Nikkei 225 declined 0.5%.

RBA monetary policy decision

The S&P/ASX 200 in Australia fell 0.33%. On Tuesday, the Reserve Bank of Australia declared its decision to hold its cash rate target firm (without making any changes). Its decision seemed firm and confident. However, it decided to stop its target (a target of 10 basis points) for Australian Government Bond by April 2024.

In a statement, RBA Governor Philip Lowe said that the decision to stop the yield target shows the earlier-than-expected progress towards the inflation target. Besides, it shows the improvement in the economy.

Lowe said that other market interest rates have shifted due to the raised possibility of higher inflation and lower unemployment. He added that the effectiveness of the yield target in keeping down the overall structure of interest rates in Australia has decreased.

After the announcement of the RBA, the Australian dollar dropped to $0.7504 versus an earlier high of $0.7534.

The broadest index of MSCI of Asia-Pacific shares traded around 0.28% higher outside Japan.

Wall Street shares record closing highs

On Wall Street, the S&P 500 gained 0.19% overnight to a record closing high of 4,613.68. The Dow Jones Industrial Average rose 94.29 points to 35,913.85 while finishing the trading day at a new record. The Nasdaq Composite raised 0.64% to about 15,595.93, also a closing record.

Currencies and oil

The U.S. dollar index tracks the greenback versus a basket of its rivals. It was at 93.922 after descending recently from above 95.

The Japanese yen traded stronger than levels around 114.5, seen against the greenback yesterday at 113.94 per dollar.

In the morning of Asia trading hours, Oil prices seemed higher, with international benchmark Brent crude futures surging 0.16% to $84.85 per barrel. U.S. crude futures floated above the flatline while trading at $84.08 per barrel.

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