Asia report: Central banks lead markets higher

In Japan, the Nikkei 225 traded choppily for much of the session, before settling up 0.58% at 16,675.45.

It was boosted by a slightly weaker yen towards the end of the day, which was last trading 0.19% behind the greenback at JPY 107.76 per USD.

The major exporters closed mixed, with Honda and Sony adding 0.62% and 0.55% respectively, while Toyota lost 0.23%.

On the mainland, the Shanghai Composite Index added a modest 0.07% to finish at 2,936.21, while the Shenzhen Composite was up 0.24% to 1,924.87.

Hong Kong’s Hang Seng Index was up 1.42% to 21,328.24 by the end of the day, while South Korea’s Kospi added 1.3% to 2,011.63 on Seoul’s first trading day of the week after the Memorial Day holiday.

The Reserve Bank of India kept its monetary policy unchanged, with a downplayed response locally and in the wider region.

Its rupee was slightly stronger on the news, and was last 0.29% ahead at INR 66.7825 per USD.

“While macroeconomic stability is returning to some emerging market economies, geopolitical tensions and high volatility in financial markets impede the resumption of momentum, and the outlook remains challenging,” the RBI said in its statement.

Locally, the release was overshadowed by political rhetoric on the future of the central bank’s governor, Raghuram Rajan.

Rajan has been under fire for his handling of the economy, particularly from senior members of the ruling Bharatiya Janata Party.

Indian markets traded higher, with the Nifty 50 up 0.8% at 8,266.45 and the Sensex adding 0.87% to 27,009.67.

Fed chair Janet Yellen also spurred Asian markets along with her comments at an event in Philadelphia late on Monday.

In her remarks, she spoke positively about the US economy, and warned markets against overreacting to the recent disappointing nonfarm payrolls figure.

She repeated recent rhetoric that rates need to rise, though she stepped down from giving even a broad time frame for them.

Oil prices were down in late Asian trading, though they were recovering as Asian traders logged off for the night.

Brent crude was last ahead 0.61% at $50.66 per barrel, and West Texas Intermediate added 0.56% to $49.97.

Down under, the S&P/ASX 200 reversed some of its earlier gains to close up 0.2% at 5,371.00.

It came after the Reserve Bank of Australia satiated market expectations by keeping its official cash rate unchanged at 1.75%.

In its statement, the central bank said overall growth was still present in the economy, although it did highlight the significant decline recently in business investment.

It also said employment market indicators were more mixed, though in the near-term they remained consistent with ongoing expansion of labour.

The Aussie dollar surged after the decision was published, and was last 1.05% ahead on the US dollar at AUD 1.3433.

“The lack of concern about the Australian dollar exchange rate has let the bulls take control and the Australian dollar shorts have been squeezed,” said easyMarkets senior dealer Anthony Darvall on the currency movement.

Major miners extended their gains in Sydney, with BHP Billiton adding 2.91%, Fortescue Metals up 2.49% and Rio Tinto rising 1.81%.

In New Zealand, the S&P/NZX 50 added 0.2% to 7,037,30, led by its highest-valued firm - airport operator AIAL - which rose 2.6%.

The Kiwi followed the lead of its Australian cousin against the greenback, and was last 0.38% stronger at NZD 1.4390.