MSCI’s broadest index of Asia-Pacific shares outside Japan was 0.65% higher, Nikkei was 0.41% higher, while Hong Kong’s Hang Seng Index was more than 2% higher
Asian stocks gained on Tuesday and the dollar strengthened, keeping the yen pinned near the 152-per-dollar levels that has traders concerned about possible intervention, as expectations that the Fed was close to reducing interest rates faded.
Data on Monday showed U.S. manufacturing grew for the first time in 1-1/2 years in March as production bounced back sharply and new orders rose, highlighting the strength of the economy and casting doubts on the timing of Fed rate reductions.
The robust manufacturing data sent yields on U.S. Treasuries up, with two-year and 10-year yields jumping to two-week highs, firming the dollar.
MSCI’s broadest index of Asia-Pacific shares outside Japan was 0.65% higher, while Japan’s Nikkei reclaimed the 40,000 points mark and was last 0.41% higher.
The yen was last at 151.715 per dollar, not too far from the 34-year low of 151.975 it hit last week, with traders keenly watching for hints of intervention from Japanese authorities.
The continued run of robust U.S. data is making the lives of Japanese currency officials attempting to support the yen growingly uncomfortable, according to Tony Sycamore, market analyst at IG.
It also means that a smoothing event (physical intervention) is unlikely to occur until after the 152.00 level breaks, he added.
Tokyo intervened in the currency market in 2022, first in September and again in October, as the yen slipped toward 152 to the dollar, levels last seen in 1990.
Japanese Finance Minister Shunichi Suzuki said on Tuesday that authorities were ready to take appropriate action against excessive currency market volatility, without ruling out any options.
Chinese stocks were mixed, with the blue chip index largely flat while Hong Kong’s Hang Seng Index was more than 2% higher, catching gains as the financial hub reopened after a public holiday on Monday.
China stocks logged their biggest daily gain in a month on Monday, after the latest manufacturing activity data indicated that the economy’s recovery is gaining traction.