WELLINGTON/SYDNEY (BLOOMBERG) - Asian stocks rebounded from a three-year low, led by Japanese shares, amid speculation losses that pushed global equities into a bear market were excessive. China's yuan jumped by the most since a US dollar peg ended in 2005, while the yen dropped with gold as haven assets fell out of favoUr.
Japan shares soared as a weaker yen and bargain-hunting drove a rebound from last week's hammering. after tumbling 13 per cent last week, the Topix index skyrocketed 8.02 per cent, its biggest one-day percentage gain since the 2008 global financial crisis. The Nikkei surged jumped 7.16 per cent, clawing back from a loss of more than 11 per cent last week.
Singapore's Straits Times Index also rallied, gaining 2.66 per cent to 2,607.47 as of 1:51 pm.
The Shanghai Composite Index declined 1.4 per cent as trading resumed after the week-long Lunar New Year holiday and the yuan gained 1.2 per cent, the biggest advance in more than a decade, after the US dollar slumped last week and the central bank chief voiced support for the currency.
US crude slipped to about US$29 a barrel, after a 12 per cent surge on Friday that burnished investor sentiment.
"Shares have become oversold again and due for at least a bounce, which may now be getting under way," said Shane Oliver, head of investment strategy in Sydney at AMP Capital Investors Ltd., which oversees about US$120 billion. "But with global growth worries remaining, it's still premature to say that shares have bottomed."
Hong Kong's Hang Seng Index gained 2.7 per cent, after sinking 5 per cent last week. Australia's S&P/ASX 200 Index advanced 1.4 per cent and India's S&P BSE Sensex rose 2 per cent, the most in four months. Futures on the S&P 500 Index added 1 per cent, after the benchmark rallied 2 per cent on Friday. Financial markets in the US will be closed on Monday for holidays.
The yuan climbed 1.3 per cent from its Feb 5 close to 6.49 per dollar in Shanghai. People's Bank of China chief Zhou said China's balance of payments is good and capital outflows are normal, with the exchange rate basically stable against a basket of other currencies, according to an interview published Saturday in Caixin magazine. The comments marked an escalation in verbal support for Chinese markets, with Zhou having left most of the commentary over the past few months to deputies.
An 11 per cent drop in China's exports in January was eclipsed by an even bigger tumble in imports, leaving a record US$63.3 billion trade surplus for the world's biggest trading nation, a report showed on Monday.
Japan announced a bigger- than-expected decline in fourth-quarter gross domestic product, spurring speculation the central bank will boost stimulus.
"Japanese policy makers need to go on an all-out war against the risk of a recession," Takuji Okubo, the Tokyo-based principal and chief economist at Japan Macro Advisors, told Bloomberg TV in Tokyo. The Bank of Japan "should keep on easing monetary policy. Prime Minister Shinzo Abe should definitely cancel the sales tax planned for next year."
The yen retreated 0.6 per cent to 113.96 per dollar, trimming this month's advance to 6.3 per cent. Japan's GDP shrank an annualized 1.4 per cent in the three months ended Dec. 31, following a revised 1.3 per cent gain in the third quarter, official data show.
The Bloomberg Dollar Spot Index, a gauge of the greenback against 10 major peers, rose 0.1 per cent after gaining 0.2 per cent on Friday as more positive sentiment dimmed the appeal of haven currencies like the yen, euro and the Swiss franc. The index has lost 1 per cent this year as the case for further US rate hikes in 2016 dims.
There's about a 30 percent probability the Fed will raise interest rates in 2016, according to futures data compiled by Bloomberg. The odds were more than 90 per cent at the end of last year.
West Texas Intermediate crude fell 0.7 per cent to US$29.24 a barrel in Monday trading, after surging 12 per cent on Friday.