Asian stocks up Mon after China currency announcement

SHANGHAI: Asian stock markets surged Monday as investors took heart from China ending its currency's two-year peg to the dollar, and the yuan surged in spot trading.

By midafternoon, the yuan was quoted at 6.8095 to the U.S. dollar, up from Friday's close of 6.8272.

But a 0.5 percent limit on the currency's daily range would prevent much larger movements in its value.

Investors gained confidence from Beijing's announcement Saturday that it would determine the exchange rate from multiple currencies, rather than the dollar alone, analysts said.

"Market players saw the announcement as a sign that Chinese authorities are confident in China's economic growth," said Kazuhiro Takahashi, equity strategist at Daiwa SMBC Securities Co. Ltd.

Japan's benchmark Nikkei 225 stock index gained 242.99 points, or 2.4 percent, to 10,238.01 - a one-month high close.

South Korea's Kospi rose 1.6 percent to 1,739.68, and Australia's S&P/ASX 200 added 1.3 percent to 4,612.60.

Hong Kong's Hang Seng index climbed 3.1 percent to 20,905.91, while China's Shanghai Composite Index added 2.8 percent to 2,583.91.

Benchmarks in Singapore and Taiwan also advanced.

The yuan's value has been pegged to the U.S. dollar since the global financial crisis took hold in 2008, causing major friction with countries who say it is undervalued for China's own benefit.

The Chinese central bank also said it plans no major exchange rate adjustments, dousing speculation over possible one-off moves in the yuan's dollar value.

That reduces uncertainty, allowing some investors to plunge back in after weeks of holding back.

"The markets were boosted because investors are becoming less risk averse than before. They are more aggressive," said Ben Kwong Man Bun, chief operating officer at KGI Securities in Hong Kong.

In China, the impact of any change in the yuan's value will be mixed, he noted, with exporters likely to suffer and importers and airlines, whose debts are denominated in U.S. dollars, gaining.

A stronger yuan could bring some relief, meanwhile, to foreign manufacturers that have struggled to compete.

The official exchange rate for China's currency stood unchanged Monday morning in line with the central bank's warning the value of the yuan would not dramatically rise after its two-year peg to the dollar ended.

The People's Bank of China left the yuan's parity rate against the U.S. dollar unchanged Monday at 6.8275, the official Xinhua News Agency said.

The rate is a weighted average of prices given by market makers, excluding highest and lowest offers.

The central bank said it would rely more on a basket of currencies that includes the U.S. dollar to determine the exchange rate, rather than the dollar alone.

In currencies, the dollar rose to 90.47 yen in Tokyo on Monday morning from 90.36 yen in New York late Friday.

The euro stood at $1.2432, little changed from $1.2435. - AP

Earlier report

SHANGHAI: Asian stock markets rose early Monday after China ended its two-year peg to the dollar over the weekend, though there was no immediate change in the yuan's exchange rate.

Japan's benchmark Nikkei 225 stock index gained 146.33 points, or 1.5 percent, to 10,141.35.

South Korea's Kospi rose 1.5 percent to 1,737.12.

Australia's S&P/ASX 200 was up 1.4 percent at 4,616.20.

China's main share benchmark, the Shanghai Composite Index, added 0.8 percent to 2,534.08.

Hong Kong's Hang Seng index climbed 2.1 percent to 20,702.33.

The Hang Seng was led by heavyweights such as China Life Insurance, which advanced 2.7 percent and Bank of China, up 2.3 percent.

The official exchange rate for China's currency stood unchanged Monday morning in line with the central bank's warning the value of the yuan would not dramatically rise after its two-year peg to the dollar ended.

The People's Bank of China left the yuan's parity rate against the U.S. dollar unchanged Monday at 6.8275, the official Xinhua News Agency said.

The rate is a weighted average of prices given by market makers, excluding highest and lowest offers.

"The Chinese side announcing the possibility of greater flexibility for the renminbi, which raises hopes for reminbi appreciation and gives more impetus to Hong Kong stocks," said Ben Kwong Man Bun, chief operating officer at KGI Securities in Hong Kong, using the other Chinese term for its currency.

The impact of any change in the yuan's value will be mixed, he noted, with exporters likely to suffer and importers and airlines, whose debts are denominated in U.S. dollars, gaining.

The yuan's value has been pegged to the U.S. dollar for two years, causing friction with countries who say it is undervalued for China's own benefit.

A stronger yuan would make Chinese exports more expensive and bring relief to foreign manufacturers that have struggled to compete.

Beijing has long refused to allow the yuan to float and denied accusations it is unfairly undervalued.

The central bank said it would rely more on a basket of currencies that includes the U.S. dollar to determine the exchange rate, rather than the dollar alone.

In currencies, the dollar rose to 90.47 yen in Tokyo on Monday morning from 90.36 yen in New York late Friday.

The euro stood at $1.2432, little changed from $1.2435. - AP

Earlier report

TOKYO: Asian stock markets rose in early trading Monday after China announced the end of its two-year-old peg to the dollar over the weekend.

Japan's benchmark Nikkei 225 stock index gained 146.33 points, or 1.5 percent, to 10,141.35.

South Korea's Kospi rose 1.5 percent to 1,737.12, and Australia's S&P/ASX 200 was up 1.4 percent at 4,616.20.

Investors gave a cautious welcome to Beijing's announcement Saturday to allow a more flexible exchange rate for the yuan.

The yuan's value has been pegged to the U.S. dollar for two years, causing major friction with countries who say it is undervalued for China's own benefit.

A stronger yuan would make Chinese exports more expensive and bring relief to foreign manufacturers that have struggled to compete.

Beijing has long refused to allow the yuan to float and denied accusations it is unfairly undervalued.

China said it would rely more on a basket of currencies that includes the U.S. dollar to determine the exchange rate, rather than the dollar alone.

Beijing said Sunday there will be no dramatic rise in the yuan.

In currencies, the dollar rose to 90.47 yen in Tokyo on Monday morning from 90.36 yen in New York late Friday.

The euro stood at $1.2432, little changed from $1.2435. - AP