Asia report: Markets rise as China exports unexpectedly improve

Markets in Asia ended mostly in the green on Thursday, after fresh data from China showed an unexpected increase in the country’s exports in July amid the ongoing trade war with the United States.

In Japan, the Nikkei 225 was up 0.37% at 20,593, as the yen strengthened 0.31% against the dollar to last trade at JPY 105.94.

Of the major components on the benchmark index, automation specialist Fanuc was up 1.03% and fashion firm Fast Retailing added 1.23%, while technology conglomerate SoftBank Group slid 2.72%.

The broader Topix index went against the regional trend, falling 0.09% to close its trading day at 1,498.66.

On the mainland, the Shanghai Composite was 0.93% higher at 2,794.55, and the smaller, technology-heavy Shenzhen Composite improved 1.01% to 1,498.95.

Eyes were on renminbi once again, after the People’s Bank of China set the onshore yuan’s loose peg at CNY 7.0039 against the dollar for the day - the weakest point since early 2008.

The country’s central bank allows the onshore yuan to trade 2% either side of the reference point it sets daily.

Earlier in the week, the US Treasury Department labelled China as a ‘currency manipulator’, after yuan renminbi crossed the psychologically-important CNY 7 mark against the dollar.

In fresh data out of Beijing, however, exports from China rose unexpectedly in July, improving 3.3% year-on-year, while imports slid 5.6%.

That left the People’s Republic with a trade surplus of $45.06bn for the month, which was lower than the $50.98bn reported in June.

The data comes amid the ongoing, escalating trade war between Beijing and Washington, with the Trump administration surprising global markets last week with a fresh 10% tariff on $300bn of Chinese goods, to take effect from 1 September.

“The People’s Bank of China fixed the yuan rate weaker than the 7 mark for the first time since 2008, despite being subject to accusations for manipulating its currency from the US President Donald Trump,” said London Capital Group senior market analyst Ipek Ozkardeskaya.

“But the selling pressure on yuan eased after the data revealed that the Chinese exports grew 3.3% in terms of US dollars in July versus a 1.3% fall expected by analysts.

“This equals to 10% growth in export revenues in terms of Chinese yuan last month.”

South Korea’s Kospi was 0.57% firmer at 1,920.61, while the Hang Seng Index in Hong Kong managed gains of 0.48% to 26,120.77.

The blue-chip technology stocks had both turned red in Seoul, with Samsung Electronics down 1.27% and chipmaker SK Hynix 1.36% weaker.

Oil prices were higher as the region went to bed, with Brent crude last up 1.28% at $56.96 per barrel, and West Texas Intermediate rising 1.88% to $52.07.

In Australia, the S&P/ASX 200 rose 0.75% to end its session at 6,568.10, while across the Tasman Sea, New Zealand’s S&P/NZX 50 was 0.8% higher at 10,874.30.

Both of the down under dollars were stronger on the greenback, with the Aussie last ahead 0.38% at AUD 1.4741, and the Kiwi advancing 0.14% to NZD 1.5493.