Asian shares up as recovery hopes overshadow virus worries

Business

A currency trader talks on the phone near the screens showing the Korea Composite Stock Price Index (KOSPI), left, and the foreign exchange rate between U.S. dollar and South Korean won at the foreign exchange dealing room in Seoul, South Korea, Monday, May 25, 2020. Asian shares are mostly higher, with Tokyo stocks gaining on expectations that a pandemic state of emergency will be lifted for all of Japan. But shares fell in Hong Kong on Monday after police used tear gas to quell weekend protests over a proposed national security bill for the former British colony. (AP Photo/Lee Jin-man)

TOKYO (AP) — Shares rose in Asia on Tuesday as some regions in Japan resumed close-to-normal business activity, with hopes for economic recovery overshadowing worries over the coronavirus pandemic.

The market focus is shifting to how various nations are adapting to getting back to business, while striving to keep new COVID-19 cases in check.

Japan lifted its state of emergency under what Prime Minister Shinzo Abe on Monday called a new lifestyle, with widespread wearing of masks and face shields.

Tokyo’s benchmark Nikkei 225 rose 2.2% in morning trading to 21,190.85. Australia’s S&P/ASX 200 was up 1.7% at 5,711.30. South Korea’s Kospi gained 1.2% to 2,019.06. Hong Kong’s Hang Seng added 1.6% to 23,327.65, while the Shanghai Composite advanced 0.7% to 2,836.40.

“As is the financial market’s wont these days … even the slimmest of positive news on the COVID-19 front triggers a bullish immune response and another wave of the peak-virus trade,” Jeffrey Halley of Oanda said in a commentary.

U.S. markets were closed for Memorial Day on Monday, while European benchmarks ended higher, reflecting the global investor optimism. France’s CAC 40 jumped nearly 2.2% to end the day at 4,539.91. Germany’s DAX surged 2.9% to 11,391.28. Trading was closed in Britain for a bank holiday.

Yoshimasa Maruyama, chief market economist with SMBC Nikko Securities, said global trade and production appeared to be bottoming out in May, though demand will likely recover gradually.

Comments from China’s central bank governor on support for its slowing economy also lifted sentiment.

Yi Gang, in an interview on the bank’s website, promised to push down borrowing costs for entrepreneurs and “support development of the real economy.”

He said the People’s Bank of China will pursue “more flexible” monetary policy. He said that was in line with official goals announced Friday by Premier Li Keqiang of helping smaller and private companies survive the coronavirus pandemic.

The interview was published as China’s largely ceremonial National People’s Congress holds its annual session, where other senior officials have stressed the need to push growth higher and create jobs, while steering clear of excess government spending.

Investors are also awaiting U.S. consumer confidence data for May and home sales for April, indicators that might give further clues into the severity of the downturn brought on by the pandemic.

Benchmark U.S. crude gained 78 cents to $34.03 in electronic trading on the New York Mercantile Exchange. It closed at $33.25 on Friday, and markets were closed on Monday.

Brent crude oil, the international standard, rose 44 cents to $36.56 a barrel.

The U.S. dollar rose to 107.85 Japanese yen from 107.69 yen late Monday. The euro rose to $1.0919 from $1.0898.

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AP Business Writer Joe McDonald in Beijing contributed.

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Yuri Kageyama is on Twitter: https://twitter.com/yurikageyama

Copyright 2020 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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