China’s industrial output grew at the fastest pace in 17 months in August, adding to signs of a rebound this quarter that include a pickup in export gains,and sending Asian stocks to three-month highs.
Factory production rose 10.4 per cent from a year earlier, the National Bureau of Statistics said in a statement in Beijing today. Retail sales advanced 13.4 per cent, while fixed-asset investment, excluding rural households increased 20.3 per cent in the January-August period, both topping estimates.
Tokyo’s Nikkei climbed 1.1 per cent, adding to Monday’s 2.5 per cent rally as news that Tokyo had won the right to host the 2020 Olympic Games added to optimism about a lasting economic recovery. “What we’re seeing today is a continuation of yesterday’s retail-driven euphoria,” said Stefan Worrall, director of equity cash sales at Credit Suisse in Tokyo, noting continued rallies for construction and tourism businesses.
Receding fears of a US military strike against Syria eased oil prices. Russia’s proposal to work with Damascus to put its chemical weapons under international control could avert planned US action and prompted President Barack Obama to say he saw a possible breakthrough in the crisis. Benchmark Brent oil prices fell 0.7 per cent to $112.88 a barrel, extending Monday’s 2.1 per cent slide. US crude slipped 0.8 per cent to $108.60. Lower oil prices are usually a positive development for Asia, a region that relies heavily on imports for its energy needs. MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.8 per cent, extending Monday’s 1.3 per cent gain to reach highs not seen since early June.
The disappointing US jobs data has cast a long shadow on the dollar, which was subdued after two straight days of declines. It wallowed at a 1-1/2 week low against a basket of major currencies, having fallen 1 per cent since Friday. Adding to the uncertainty, San Francisco Federal Reserve Bank President John Williams said on Monday he hasn’t made up his mind yet over whether to support a reduction in Fed bond purchases. The weakened dollar helped the euro recover from last week’s sell-off sparked by dovish comments from the European Central Bank. The common currency was steady at $1.3258, keeping close to a 1-1/2 week peak of $1.3281 scaled on Monday. The greenback fared better against the yen, which sagged on Monday.
Reuters/Bloomberg
