Stocks in Asia experienced a notable uptick on Thursday as authorities in the region pushed back against a strengthening dollar, leading to the stabilization of currencies and restoring a sense of confidence in financial markets.
Major regional stock markets, including those in China, Japan, Australia, and South Korea, all recorded gains. Furthermore, a global stocks gauge showed a slight increase, positioning the benchmark for its first advance in a week.
Rajat Agarwal, Asia strategist at Societe Generale, commented on the market dynamics, stating, “The current market reaction is being driven by the pause in the dollar’s rally and increase in US bond yields.” He highlighted that while there is low concern regarding growth, the movements of the dollar and Treasuries remain key triggers to watch.
Among Asian currencies, the South Korean won led the climb against the dollar, while the Japanese yen remained steady. This followed a joint statement from US Treasury Secretary Janet Yellen alongside the finance ministers of Japan and South Korea expressing “serious concerns” about the depreciation of the two Asian currencies.
A global gauge of emerging market currencies indicated some stability after reaching a low point earlier in the week, heading for a second day of gains. Additionally, an index tracking the dollar fell for a second consecutive day.
Meanwhile, Treasuries experienced minimal changes following a rally on Wednesday that saw an eight-basis-point decrease in the 10-year yield.
The pushback against a stronger dollar by regional authorities and the resulting stabilization of currencies have bolstered investor sentiment in Asian markets, providing a respite from recent volatility and uncertainties surrounding global economic conditions.
