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Shares in Asia mixed with Tokyo, Shanghai down on China weak imports

Published 09/07/2015, 11:54 PM
Updated 09/07/2015, 11:55 PM
© Reuters.  Asian shares mixed, Shanghai down on trade

© Reuters. Asian shares mixed, Shanghai down on trade

Investing.com - Asian shares were mixed on Tuesday with China dominating sentiment after weak import data highlighted the possibility of further monetary easing.

The Nikkei 225 fell 1.50% and the Shanghai Composite was down more than 2% at one point, before retracing to a fall of 1.38%. The S&P/ASX 200 however rose 0.79%.

In China. August exports fell 6.1%, a tad more than the 6% seen and imports slumped 14.3%, compared to an expected 8.2% drop. The trade surplus came in at $60.24 billion, better than the $48.2 billion seen.

The trade surplus was the second highest on record, suggesting capital outflows in August may have been even worse than was suggested by the $93.9 billion drop in foreign exchange reserves last month.

Weak imports suggest exports in the coming months aren't likely to improve given that half of China's foreign trade is in importing raw materials and parts from abroad for assembly before exporting them again.

The August data argues for fresh policy easing, with the yuan exchange rate now in play following the devaluation on the 11th of that month. The PBOC is understood to have pushed the yuan onto the depreciation path last month because of pressure from government agencies which argued that a weaker currency was needed to restore trade competitiveness.

The data comes as China's National Bureau of Statistics on Monday revised down the 2014 GDP growth rate to 7.3% from the previously announced 7.4% on Monday. For this year, China has set a growth target of about 7%, the slowest pace in 25 years.

U.S. markets were shut on Monday, with the focus still on clarity clarity on when the Federal Reserve will decide to raise short term interest rates. The timing of a Fed rate hike has been a constant source of debate in the markets in recent months.

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