BENGALURU: Asian shares rose and regional currencies rebounded on Wednesday, lifted by hopes that an upcoming high-level US-China meeting later in the week could ease trade tensions.
Equity markets in Manila and Bangkok advanced over 1.6% each, while shares in Seoul and Jakarta added over 0.5%, respectively.
US President Donald Trump’s remarks that Beijing is eager to strike a trade deal to end the tariff war, signalling a potential summit between the economic power-houses “at the right time,” fuelled market optimism across Asia.
China’s central bank bolstered Chinese markets by slashing bank reserve requirements by 50 basis points—injecting 1 trillion yuan into the economy—while simultaneously cutting seven-day reverse repo rates by 10 basis points to combat slowing growth.
The Chinese yuan traded rangebound, last down 0.1%, while equities in Shanghai climbed 0.4%.
Asian currencies have whipsawed dramatically in recent days, with the Taiwan dollar posting a historic 6% two-day surge against the greenback before steadying Wednesday, up 0.2%.
In parallel with the Taiwan dollar’s record move in recent days, the South Korean won on Monday also clocked its biggest two-day rally in 15 years.
The won firmed 1.5% to its strongest level since November 29 on Wednesday, strengthening as much as 1.6% to 1,379 per US dollar, after traders returned from an extended holiday.
Analysts credit speculation around currency appreciation commitments in a potential US trade scenario, though denied firmly by Taiwan’s central bank and president, for the sudden capital influx into Taiwan’s dollar-heavy, unhedged market.
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