Asian stock markets climbed again yesterday, tracking another surge in Europe and New York and extending a rebound from last week’s hammering fuelled by Britain’s shock vote to leave the EU. The pound also held on to most of its gains versus the dollar as other higher-yielding, riskier, currencies benefited from hope that the fallout from Friday’s referendum will not be as bad as feared.
Speculation that authorities will announce monetary easing measures to offset any negative impact have also provided strong support. Stephen Innes, a senior trader at Oanda Asia Pacific said in a note: “The global central bankers are in the background and the markets realise that the central bankers are going to stand in front of any capitulation.”
Tokyo rose 0.1%, although it ended well off its earlier highs owing to profit taking having risen about 4% since Friday’s close.
Hong Kong added 1.8% and Seoul closed up 0.7%. Singapore and Taipei each put on more than 1%, while Manila surged 2%. But Shanghai closed 0.1% down. Sydney climbed 1.7% ahead of a neck-and-neck general election in Australia at the weekend.
“The initial shock over the UK voting out of the EU is easing across the world,” Mitsushige Akino, a Tokyo-based executive officer at Ichiyoshi Asset Management Co, told Bloomberg News. “We’ve survived the event-related risk, and investors are beginning to see that the impact on the actual economy is limited. There’s hope for policy measures globally, not just in Japan, so that’s supporting markets.” Trading floors are rife with talk of fresh stimulus measures from key central banks.
After a $17bn boost by South Korea, Japan is in focus after the country’s prime minister, finance minister and central bank boss held talks Wednesday.
On currency markets the pound edged down slightly from its New York close but managed to hold around $1.3445, well up from the 31-year-low $1.3121 touched on Monday. There were also gains for emerging market and other risk currencies against the US dollar, with South Korea’s won up 0.7%, India’s rupee 0.1% higher and the Malaysian ringgit gaining 0.3%.