Asian stocks rise despite third yuan devaluation
China’s central bank eased investors’ fears.
Asian stocks mostly bounced back today (August 13th) despite the Chinese currency falling for a third consecutive day.
The People's Bank of China (PBOC) set the yuan’s central parity rate at 6.4010 yuan for $1 - a 1.11 per cent drop from the previous day’s 6.3306.
However, markets rebounded after the institution reiterated that there was no basis for continued currency depreciation.
In a press conference in Beijing, it said the country's strong economic environment, sustained trade surplus, sound fiscal position and deep foreign exchange reserves remain "strong support" for the exchange rate.
The Chinese central bank's "opaque communications policy may well have led to panic over-selling earlier in the week," Angus Nicholson of IG markets said in a commentary. "The markets have now digested the prospects of a CNY devaluation and are judging it as not as big of a risk as earlier."
Japan's Nikkei 225 jumped one per cent to 20,595.55, South Korea's Kospi gained 0.4 per cent to 1,983.46 and Hong Kong's Hang Seng was up 0.4 per cent to 24018.80. The Shanghai Composite Index in mainland China soared 1.8 per cent to 3954.78 and Australia's S&P/ASX 200 edged up 0.1 per cent to 5,387.90.
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