By Gina Lee
Investing.com – Asia Pacific stocks were mostly up on Wednesday morning, following a modest rise in U.S. shares during the previous session over hopes for more, and bigger, U.S. stimulus measures to combat the impact of COVID-19.
China’s Shanghai Composite was up 0.29% by 10:16 PM ET (3:16 AM GMT), and the Shenzhen Component jumped 1.55%. The People’s Bank of China announced January's loan prime rate, with no changes expected in both the one-year and five-year loan prime rates.
Investors also weighed comments from members of President-Elect Joe Biden’s administration suggesting a continued tough line towards China. They vowed to fight “abusive” trade practices and bar products from Xinjiang, the province housing the ethnic Uighur Muslim minority, on Tuesday.
Secretary of the Treasury nominee Janet Yellen said during her Senate confirmation hearing that the U.S. is “prepared to use the full array of tools” to address actions such as “dumping products, erecting trade barriers and giving illegal subsidies to corporations.”
Meanwhile, Secretary of State nominee Antony Blinken added he agreed with the administration of outgoing President Donald Trump in designating China’s crackdown on Uighurs and other minorities in Xinjiang a genocide. He also told the Senate Foreign Relations Committee that the U.S. should bar imports of Xinjiang-produced goods and prohibit exports to companies participating in human rights violations in the region.
Hong Kong’s Hang Seng Index gained 0.38%.
Japan’s Nikkei 225 fell 0.51%. The Bank of Japan due to hand down its policy decision on Thursday.
South Korea’s KOSPI inched up 0.10% and in Australia, the ASX 200 rose 0.56%.
Investors are also betting that Biden and his team will use its Congressional majority to drive economic recovery and growth. However, Republican resistance is already building towards the $1.9 trillion COVID-19 relief plan proposed by Biden during the previous week.
However, Yellen, who could be confirmed as soon as Thursday, also stoked hopes for more U.S. stimulus measures. She also said during her hearing that aid for the unemployed and small businesses would provide the “biggest bang for the buck” and urged lawmakers to “act big” in efforts to boost economic recovery from COVID-19.
The comments helped to lift investor sentiment.
“Yellen is a positive,” Jefferies (NYSE:JEF) International strategist Mohit Kumar told Bloomberg.
“We should have greater co-operation between the Federal Reserve and the Treasury, with both the monetary and fiscal policy working together and supportive. This is a good backdrop for risk sentiment,” Kumar added.
Trump is now in the final day of his term, ahead of Biden and his administration taking office later in the day.
The European Central Bank will also hand down its policy decision later in the day.