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Asian shares mixed as China trade data weighs, stimulus hopes dashed

Published 04/10/2014, 12:14 AM
Updated 04/10/2014, 12:18 AM
Shares in China ease after trade data disappoints

Investing.com - Asian shares traded mixed on Thursday with China down after trade data figures that suggest distortions from hot money flows and trade credit and invoicing issues.

China data showed a trade surplus of $7.71 billion for March, compared to an expectation of $900 million, erasing some concerns after a deficit of $22.9 billion in the previous month.

The Shanghai Composite fell 0.05% in the morning session, but Japan's Nikkei 225 was up 0.69% before the data and the Hang Seng index climbed 0.14% at the morning close after the figures.

In China, the focus was on property shares with Poly Real Estate Group down 3.4% and China Vanke sliding 2.2%, mainly on dashed hopes for new stimulus spending.

Chinese Premier Li Keqiang on Thursday repeated that the government won't respond to the current economic slowdown by rolling out fresh stimulus policies.

"We will not use short-term strong stimulus policies because of temporary economic growth volatility," Li told the Boao Forum in southern China's Hainan Island.

He reiterated that this year's 7.5% growth target is a flexible one and the main focus is on job creation.

Overnight, U.S. stocks rallied after the minutes from the Federal Reserve's March policy meeting revealed monetary authorities unanimously agreed to ditch a target it was preparing to use to raise interest rates.

The Dow 30 rose 1.11%, the S&P 500 index rose 1.09%, while the Nasdaq index rose 1.72%.

The Federal Reserve Board of Governors unanimously voted to scrap a threshold at which interest rates would rise once the unemployment rate hits 6.5%, according to the minutes of the Fed's March policy meeting.

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In the past, the Fed had indicated rates could rise when the unemployment rate hits or approaches 6.5% provided that figure accompanied a 2.5% inflation rate.

Today, the headline unemployment rate stands at 6.7%, not far from the previous threshold, though inflation remains well below 2.5%, prompting the Federal Reserve to do away with its rate-hike target, which drew applause from Wall Street by allaying fears borrowing costs would rise while the economy still remained soft.

"Participants agreed that the existing forward guidance, with its reference to a 6.5% threshold for the unemployment rate, was becoming outdated as the unemployment rate continued its expected gradual decline," the minutes read.

"Most participants felt that the quantitative thresholds had been very useful in communicating policy intentions when employment was far from mandate-consistent levels, but, with the economy having moved appreciably closer to maximum employment, the forward guidance should emphasize that the Committee is focusing more on a broader set of economic indicators."

After the close of European trade, the DJ Euro Stoxx 50 rose 0.10%, France's CAC 40 rose 0.40%, while Germany's DAX rose 0.16%. Meanwhile, in the U.K. the FTSE 100 rose 0.68%.

On Thursday, the U.S. Labor Department is to release its weekly report on initial jobless claims.

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