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Asian Shares Gain as Fed, PBOC Signal Continued Support

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TOKYO Reuters Asian shares advanced on Thursday as dovish comments by the U.S. Federal Reserve chief and fresh liquidity from Chinas central bank propped up investor appetite, even as inflationary and growth risks hung over the outlook.

Separately, data from China showed its economic recovery losing steam, with second quarter growth slowing and missing expectations.

On an annualised quarterly basis, which many developed countries use, Chinas growth was about 5.3, which is higher than other countries but not strong by Chinas standards, said Tomo Kinoshita, global strategist at Invesco Asset Management. And we expect growth to slow in the second half of this year due to weakness in exports and investments.

The Chinese data also showed retail sales, industrial output and fixed investment growth softening, though not as much as expected.

MSCIs broadest index of AsiaPacific shares outside Japan rose 0.8, with Hong Kongs Hang Seng leading with 1.3 gains, recovering from this months earlier falls, which were driven by tech firms.

Mainland Chinese shares rose, with CSI300 index up 0.7.

Earlier in the day, Peoples Bank of China PBOC rolled over part of the 400 billion yuan maturing oneyear mediumterm lending facility MLF loans, by injecting 100 billion yuan 15.46 billion.

The move, coupled with the PBOCs surprise reserve requirement ratio cut announced last week, pointed to a loosening policy bias at the PBOC.

I think its a signal that yes, the monetary policy tone is…

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