Asian markets traded on a strong note on Tuesday, led by a resurgence in Japan and South Korea after returning from holidays, and bolstered by diminishing concerns over an extended Israel-Hamas conflict. This positive sentiment was further buoyed by dovish remarks from U.S. Federal Reserve speakers Logan and Jefferson, who hinted at less urgency for a rate hike.
Japan's Nikkei index experienced a significant 2.7% surge, driven primarily by an 8% increase in mining stocks. The reopening of markets in Japan and South Korea also contributed to a positive commencement in Australia's ASX 200. The Kospi index in South Korea and the ASX 200 in Australia also posted robust morning gains.
In contrast to the overall upbeat trend, China's Shanghai Composite fell by 0.5%, attributable to liquidity issues at Country Garden, a major real estate developer.
Simultaneously, the onshore Chinese Yuan reached a one-month high. This was supported by strong fixes from the People's Bank of China (PBOC) and market anticipation of a more dovish approach from the U.S. Federal Reserve. The softer stance from the Fed is expected to alleviate some of the pressure on emerging market currencies, including the Yuan.
Overall, the Asian markets demonstrated resilience amidst geopolitical tensions and domestic challenges, with investors closely watching the Fed's next moves.
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