Asia close: Stocks mixed as US dollar weakens, IMF cautions on growth

Stockmarkets in the Pacific Rim finished on a mixed note amid softer than expected economic data out of China and against the backdrop of a weaker US dollar, with the latter marking a fresh year-to-date low.

As of 11:53 BST the US dollar spot index was 0.47% lower at 92.19 and dollar/yen was down by 0.64% to 105.74.

Caixin´s Chinese manufacturing sector purchasing managers´ index slipped from a reading of 49.7 in March to 49.4 (consensus: 49.9). That came close on the heels of a weak reading for the 'official' PMI published on 1 May and in a similar gauge linked to the country´s services sector.

Nevertheless, economists at Capital Economics gave short shrift to those three weak readings, attributing them to the difficulty of adjusting for seasonal quirks in the data.

The Shanghai Stock Exchange´s composite index closed 1.85% or 56.91 points up on the day at 3,131.79, alongside gains of 1.22% in South Korea´s Kospi while Hong Kong´s Hang Seng ended the day 1.80% lower to 6,030.11.

Taiwan´s Taiex retreated 1.0% to 8,294.12 and Thailand´s SET lost 0.58% or 5.20 points to end at 886.63.

In parallel, on Tuesday the International Monetary Fund trimmed its forecast for economic growth in the Asia-Pacific region from 5.4% in 2015 to 5.3% in 2016.

“Downside risks continue to dominate the economic landscape. In particular, the turning of the credit and financial cycles amid high debt poses a significant risk to growth in Asia, especially because debt levels have increased markedly over the past decade across most of the major economies in the region, including China and Japan,” the Washington-based lender said.

Tokyo markets were closed for trading on Tuesday in observance of a public holiday. However, on Monday the Nikkei-225 slid 3.11% or 518.67 points to end at 16,147.38

Sydney´s ASX 200 index advanced 2.11% to 5,353.84, alongside a gain of 0.75% to 4,894.01 for New Zealand´s NZX 20 index.

The Reserve Bank of Australia unexpectedly cut its cash rate on Tuesday by 25 basis points to 1.75%, surprising the small majority of economists who had been expecting it to stay put.

Rate-setters at the RBA referenced weaker forecasts for inflation for the move, together with "difficult" economic conditions in a number of Asian economies and recent more "mixed" economic indicators.

Hours after the central bank announced its decision to ease policy, the government unveiled an expansionary public budget.

Treasurer Scott Morrison forecast a A$37.1bn deficit for the twelve months through June 2017 which would incerase the size of Australia´s debt pile to 19.2% of gross domestic product.