Asian markets mostly gained in early trading Friday as U.S. Federal Reserve officials prepare to meet in Jackson Hole, Wyoming.
Fed Chairman Jerome Powell is scheduled to speak Friday morning to kick off the annual conference, and investors will be looking for the central bank’s thoughts about the chances of recession following an inversion of the yield curve last week. But as MarketWatch has reported, economists believe the Fed is likely to keep its policy thoughts to itself.
Meanwhile, tensions between Japan and South Korea rose, as an intelligence-sharing deal became the latest casualty of a bitter trade dispute. South Korea said Thursday it would stop sharing intelligence about North Korea with its Asian neighbor. Last month, Japan revoked South Korea’s preferential trade status. South Korea accuses Japan of weaponizing trade to punish it over a separate dispute linked to Japan’s brutal colonial rule of the Korean Peninsula from 1910 to 1945.
Japan’s Nikkei NIK, +0.26% rose 0.2% while South Korea’s Kospi 180721, +0.05% inched up 0.1%. Hong Kong’s Hang Seng Index HSI, +0.48% gained 0.6% and the Shanghai Composite SHCOMP, +0.48% advanced 0.5%. Benchmark indexes in Taiwan Y9999, +0.00% , Singapore STI, -0.39% and Indonesia JAKIDX, +0.02% were down slightly. Australia’s S&P/ASX 200 XJO, +0.23% rose 0.2%.
Among individual stocks, convenience-store chain FamilyMart 8028, +5.44% rose in Tokyo trading, as did Nippon Steel 5401, +2.74% , while Japan Post 6178, -1.35% fell amid a continuing investigation into its sales practices. In Hong Kong, insurers AIA Group 1299, +1.70% and China Life Insurance 2628, +3.97% gained, while property stocks such as Country Garden 2007, -2.42% fell. SK Hynix 000660, +1.08% advanced in South Korea, and Foxconn 2354, +1.26% gained in Taiwan. In Australia, Wesfarmers WES, +1.25% and Fortescue Metals FMG, +2.65% rose.
China’s onshore yuan last traded at 7.0909, its weakest level since 2008. The People’s Bank of China may be “sending a message” to U.S. trade hawks that it “will let the yuan gradually weaken as a policy weapon to neutralize the effect of increased tariffs,” Stephen Innes, managing partner of Valour Markets, said in a note.
“While the markets are currently sitting in a state of currency-war detente, with the PBoC possibly putting one of their trade wars cards on the table, it’s not the cheeriest of signals for risk assets in my views,” he said.