A surprising tightening in Singapore and historically strong growth in Chinese producer prices are among the events affecting the markets.
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Several of the stock markets in Asia are rising sharply on the morning twig, while elsewhere there is a flat development.
This is the situation on the stock exchanges in Asia and the Pacific region at 05.30:
- The Nikkei 225 in Tokyo climbs 1.01 percent
- Kospi in Seoul rises 1.26 percent
- The ASX 200 in Sydney is up 1.17 percent
- The FTSE Straits Times in Singapore points up 0.01 percent
- Shanghai Composite is up 0.03 percent
The Hong Kong Stock Exchange is closed due to a public holiday. Also on Wednesday, the stock exchange had to stay closed, but that time it was due to a violent storm.
Strong China growth
Developments on the continent come after the US stock markets rose for the first time in three days on Wednesday night. It happened after the US Federal Reserve presented the minutes of the previous interest rate meeting.
Here it emerged that the Fed is soon ready to reduce its extensive support purchases of securities, also known as “tapering”, as it has done for years to support the financial markets.
The Chinese producer price index increased by 10.7 per cent in September compared with the same month last year. The National Bureau of Statistics has never before measured a higher increase since they started the measurements in 1996, writes Reuters.
In advance, a growth of 10.5 percent was expected, according to the news agency.
Inflation in the country ended the same month at 0.7 per cent in September, which was slightly weaker than expected.
First tightening in three years
Singapore’s central bank surprised most when they chose to tighten monetary policy last night. The central bank chose to increase the path on the currency band somewhat.
This is the first time in three years that the central bank is tightening monetary policy, he writes Reuters.
According to the news agency, 11 out of 13 economists expected that the central bank would not make changes in the currency band.
The central bank uses the currency band to make changes in monetary policy, rather than using interest rates as many other countries do.
Singapore has a low domestic economy, and relies heavily on imports and exports. This is the main reason why a currency bond is considered an important ingredient in the economy.
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