# Asian shares muted as investors fret over China reopening
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-12-28
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: Asian equities swing as China reopens economy, virus concerns linger
Meta Description: Stay updated on the latest movements in Asian equities as investors navigate through market uncertainties and economic recovery prospects amid the ongoing
URL: https://financedigest.com/asian-shares-muted-as-investors-fret-over-china-reopeninghtml

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By Ankur Banerjee

SINGAPORE (Reuters) – Asian equities swung between losses and gains in choppy trading on Wednesday as investors looked for direction after China took further steps towards reopening its COVID-battered economy, with worries over an economic slowdown weighing on sentiment.

MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.12%, having slid as much as 0.5%. After having the best monthly performance in nearly 30 years in November, the index is flat for December with two [days of trading](https://www.financedigest.com/stocks-fall-treasury-yields-rise-upon-final-2022-trading-day.html "Stocks fall, Treasury yields rise upon final 2022 trading day") left.

[European stock futures indicated the stocks were set](https://www.financedigest.com/european-shares-set-for-weekly-gain-on-u-s-inflation-outlook.html "European shares set for weekly gain on U.S. inflation outlook") to fall, with the Eurostoxx 50 futures down 0.13%, German DAX futures down 0.05% and FTSE futures 0.24% higher.

China stocks were little changed, while the [Hong Kong](https://www.financedigest.com/hong-kong-finance-official-to-make-first-visit-to-britain-in-three-years.html "Hong Kong finance official to make first visit to Britain in three years") stock market rose 2%, encouraged by China’s announcement on Monday it would stop requiring inbound travellers to go into quarantine starting from Jan. 8.

A faster than anticipated peak of infection has stoked [expectations that a quick economic recovery is on the cards but surging cases that are straining resources and putting hospitals under pressure has put a lid on investor](https://www.financedigest.com/wave-of-lawsuits-over-ftx-expected-but-investors-will-face-legal-hurdles.html "‘Wave’ of lawsuits over FTX expected, but investors will face legal hurdles") enthusiasm.

[Wall Street](https://www.financedigest.com/weary-wall-street-cheers-improved-consumer-confidence.html "Weary Wall Street cheers improved consumer confidence") ended lower overnight as U.S. [Treasury yields](https://www.financedigest.com/wall-st-flutters-treasury-yields-ease-as-powell-resumes-testimony.html "Wall St flutters, Treasury yields ease as Powell resumes testimony") pressured interest-rate-sensitive growth shares.

[Investors have been trying to gauge how high the Federal Reserve will need to raise rates as it tightens policy in its continuing](https://www.financedigest.com/southampton-development-continues-to-excite-local-investors.html "SOUTHAMPTON DEVELOPMENT CONTINUES TO EXCITE LOCAL INVESTORS") battle against inflation while also trying to avoid tilting the economy into recession.

The [yield on 10-year Treasury](https://www.financedigest.com/stocks-jump-as-treasury-yields-ease-and-oil-prices-sell-off.html "Stocks jump as Treasury yields ease and oil prices sell off") notes was down 1.1 basis points to 3.847%, hovering around the five-week high of 3.862% it touched in the previous session.

The [yield on the 30-year Treasury bond](https://www.financedigest.com/wall-st-stocks-fall-bond-yields-rise-as-china-drops-quarantine-rule.html "Wall St stocks fall, bond yields rise as China drops quarantine rule") was down 2.9 basis points to 3.914%, while the two-year U.S. Treasury yield, which typically moves in step with [interest rate](https://www.financedigest.com/ecbs-centeno-says-interest-rate-close-to-peaking-if-no-new-shocks.html "ECB’s Centeno says interest rate close to peaking if no new shocks") expectations, was down 1.7 basis points at 4.351%.

Meanwhile, Bank of Japan (BOJ) policymakers [discussed growing prospects that higher wages could finally eradicate the risk of a return](https://www.financedigest.com/greece-britain-discussing-parthenon-sculptures-return-but-deal-not-close-athens-says.html "Greece, Britain discussing Parthenon Sculptures return but deal not close, Athens says") to deflation, a summary of opinions at their December meeting showed on Wednesday.

At the Dec. 19-20 meeting, the [BOJ kept its ultra-easy policy](https://www.financedigest.com/yen-trims-gains-as-possible-next-boj-governor-says-current-policy-appropriate.html "Yen trims gains as possible next BOJ governor says current policy appropriate") but stunned markets with a tweak to its bond yield control policy, allowing long-term interest rates to rise more.

While markets have had growing expectations that the Japanese central bank is likely to change its policy, investor focus will likely zero in on who will lead the [BOJ when Governor](https://www.financedigest.com/japanese-yen-gains-as-ueda-set-to-be-named-next-boj-governor.html "Japanese yen gains as Ueda set to be named next BOJ governor") Haruhiko Kuroda steps down in April.

We think once the new governor is appointed, then the policy review will follow in the [second quarter](https://www.financedigest.com/workday-announces-fiscal-2018-second-quarter-financial-results.html "Workday Announces Fiscal 2018 Second Quarter Financial Results") of 2023,” ING economist Min Joo Kang said. Another tweak in the yield curve control policy was possible in the first half of 2023, and ING expected a rate [hike in late 2023 or early](https://www.financedigest.com/analysis-investors-stick-to-bets-on-early-end-to-ecb-hikes-as-uncertainty-grows.html "Analysis-Investors stick to bets on early end to ECB hikes as uncertainty grows") 2024, she said.

The spring salary negotiation [next year](https://www.financedigest.com/eu-could-face-gas-shortage-next-year-iea-warns.html "EU could face gas shortage next year, IEA warns") is the most important to watch for further meaningful policy change for the Bank of Japan.

Australia’s S&P/ASX 200 index lost 0.45%, while Japan’s Nikkei slipped 0.6%.

In the currency market, the Japanese yen weakened 0.39% [versus the greenback at 134.00 per dollar](https://www.financedigest.com/russian-rouble-nears-4-week-high-versus-dollar.html "Russian rouble nears 4-week high versus dollar"), with the euro rose 0.01% to $1.0639.

The dollar index, which measures the safe-haven greenback against six major currencies, rose 0.038%.

U.S. crude rose 0.1% to $79.61 per barrel and Brent was at $84.42, up 0.11% on the day.

(Reporting by Ankur Banerjee; Editing by Bradley Perrett)


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