By Daniel Inman
Chinese stocks moved higher on Tuesday, after the People's Bank
of China injected money into the financial system, while a weaker
yen helped push Japanese stocks higher.
The dollar rose against the yen in Asian trade as the Bank of
Japan starts a two-day policy meeting on Tuesday. Although there is
little expectation of a change in monetary policy, the yen softened
because of hopes that Bank of Japan Gov. Haruhiko Kuroda might hint
at additional easing at his news conference after the meeting
finishes.
The yen was last trading at Yen104.58 to the dollar, compared
with Yen104.17 late Monday in New York. The softer Japanese
currency helped propel the Nikkei 1.4% higher.
China was in focus on Tuesday after the People's Bank of China
moved to offer funds to big lenders on Monday after short-term
borrowing costs leapt as demand for cash increased ahead of the
Lunar New Year holiday. The weighted seven-day repurchase agreement
rate was at 5.4% on Tuesday, from 6.6% on Monday.
The effect was most apparent in Hong Kong, where the Hang Seng
China Enterprises Index rose 2.1%, while the broader Hang Seng
Index added 0.7%. In mainland China, the Shanghai Composite rose
0.4%.
Chinese markets have been sensitive to domestic money market
rates after a cash crunch last summer led to a sharp fall in
Shanghai. The recent rise in rates, along with a fourth-quarter
slowdown in Chinese gross domestic product, resulted in losses for
both Hong Kong and Shanghai on Monday.
More broadly across Asia, there was no guidance from the U.S.
overnight, as Wall Street was closed for a public holiday. Regional
markets started the day close to the break-even mark, but gained
after China and Japan moved higher.
Australia's S&P ASX 200 was up 0.5% and South Korea's Kospi
rose 0.3%. Singapore's Straits Times Index added 0.3%.
In corporate news, Lenovo Holdings rose by 3.3% in Hong Kong
after reports said that the computer firm is a potential buyer of
IBM's low-end server business . The Wall Street Journal reported
over the weekend that IBM had put the business back on the auction
block after abandoning a sale effort last year. On Tuesday, Lenovo
acknowledged in a statement to the Hong Kong Stock Exchange that it
is in preliminary talks on a "potential acquisition."
Elsewhere, Woodside Petroleum dropped 1.3% in Australia after
the oil and gas company was downgraded by both Macquarie and the
Royal Bank of Canada. Videogame company Nintendo dropped 2.3% in
Japan, extending its 6.2% fall on Monday, prompted by poor sales of
its Wii U console.
Write to Daniel Inman at daniel.inman@wsj.com
