By Adam Claringbull
Investing.com – Asian Pacific stocks were mostly up on Monday morning after U.S. President Donald Trump’s administration proposed a new stimulus deal. China has also acted to constrain the recent rises in the yuan.
The White House’s latest COVID-19 stimulus bill acted as a driver for markets, with news of the $1.8 trillion proposal giving investors encouragement. However, neither Democrat nor Republican lawmakers are yet to agree on the measures, with both sides still far apart on levels of spending, with talks between the two parties still deadlocked.
Investors were also focused on the upcoming U.S. elections where Democrat candidate Joe Biden appears to be leading President Trump as the race enters its final weeks. Should Mr. Biden win, a substantial stimulus package is likely to be delivered.
“Markets still have high hopes of a large-scale stimulus package and are indifferent about whether it occurs this side of November or not,” said National Australia Bank (OTC:NABZY) economist Tapas Strickland.
In China, the country's central bank pushed measures to reduce the yuan’s recent steep gains after the nation’s national Golden Week holidays.
The Shanghai Composite rose 1.80% by 10:30 PM ET (2:30 AM GMT) and the Shenzhen SZSE Composite jumped 1.83%.
The yuan had risen steeply on Friday, pushing up 1%, with overall gains of 7.2% since May. The People’s Bank of China has responded by cutting forward reserve requirements in an attempt to reduce the currency’s upwards impetus.
“The authorities have not stood in the way of yuan strength, but this move could be seen as a sign that they want to slow the pace of appreciation … We still see scope for further yuan appreciation, especially with China’s strong growth momentum ... but the authorities want to encourage more two-way flows, and removing the reserve requirement will help.”” said ANZ Bank’s head of Asia research, Khoon Goh told Reuters.
The Australian ASX 200 edged up 0.16% and South Korea’s KOSPI was up 0.53%
Hong Kong’s Hang Seng Index gained 1.41%, while Japan’s Nikkei was down 0.38%