Asia: Australia rises following RBA rate cut, Japan suffers with bonds decision
Asian stocks were mixed on Tuesday following the Australia’s central bank rate cut announcement.
The ASX index was up 1.46% after the Reserve Bank of Australia decided to cut its interest rates to a record low of 2.25% in a bid to stimulate economic growth.
A weaker Australian dollar also helped the country’s exporters with lower priced commodities. The dollar was at $0.7648 on Tuesday at 10:33 compared to $0.7803 the day before.
Shanghai rose 2.25% and Hong Kong’s finished higher by 0.29% after a negative start. The stocks were helped by news that Greece’s new government backed down from plans to ask the euro-area to write-off its foreign debt.
“Varoufakis has finally laid out Syriza’s proposed Greek debt plan, and it’s not as radical as many hoped and/or feared, with the party putting forward a selection of ‘debt swaps’ that would ease Greece’s financial situation,” said Connor Campbell, analyst at Spreadex.
However, Japan’s Nikkei 225 was down 1.27% driven by the decision of the Japanese government bonds to cut its annual yield due to weak auction demand.
Meanwhile, the country’s monetary base decreased on January to 37.4% year-on-year from 38.2% same time last year.
Brent crude rose 3.1% to $56.52 per barrel, according to ICE.
CMC Markets analyst Jasper Lawler said: “A break higher in oil prices enabled a late turnaround for markets on Monday and that momentum has been built on overnight with a rate cut in Australia and raised hopes of a resolution to the Greek debt negotiations helping US stocks head towards a higher open on Tuesday.”