Investing.com – Asia Pacific stocks were mostly up on Thursday morning with investors digesting mixed Chinese economic data alongside U.S. Federal Reserve Chairman Jerome Powell’s testimony that economic recovery from COVID-19 is “still a ways off” from the levels needed to begin asset tapering.
China’s Shanghai Composite inched down 0.10% by 10:10 PM ET (2:10 AM GMT) while the Shenzhen Component inched up 0.03%. Data released earlier in the day said China’s second-quarter GDP grew 7.9% year-on-year and 1.3% quarter-on-quarter. It also said industrial production grew 8.3% year-on-year in June and that the unemployment rate was unchanged at 5%.
The data comes as the debate on whether COVID-19 recovery in the world’s second-largest economy is peaking. The upcoming maturity of policy loans could indicate the extent to which the People’s Bank of China will further loosen monetary policy.
Meanwhile, Sino-U.S. tensions continue to simmer as the U.S. said it does not plan to revive a regular economic dialogue with China that was suspended under the previous Donald Trump administration. The U.S. Senate also passed a bill to ban all products from China’s Xinjiang province.
Hong Kong’s Hang Seng Index gained 0.66%. The city will now allow vaccinated residents and workers to return from nations it has deemed extremely high-risk, including the U.K., Brazil, India, Pakistan, Indonesia, the Philippines, South Africa and Nepal. Unvaccinated students can also return home from the U.K. under the relaxation.
South Korea’s KOSPI was up 0.26% with the Bank of Korea keeping its interest rate unchanged at 0.5% as it handed down its policy decision earlier in the day. June trade data that was also released earlier in the day said exports grew 39.8% year-on-year, imports grew 40.7% year-on-year and the trade balance stood at KRW4.45 billion ($3.87 million).
On the COVID-19 front, the country broke yet another record as 1,600 daily cases were reported as of Jul. 15.
In Australia, the ASX 200 inched up 0.03% over lower-than-expected labor data for June released earlier in the day. The employment change was a lower-than-expected 29,100 and the full employment change was 51,600 while the unemployment rate was a better-than-expected 4.9%.
Powell gave reassurances in his testimony before the House of Representatives Financial Services Committee on Wednesday that monetary policy would remain accommodative and that inflationary pressures will likely moderate. However, he reiterated that the central bank was prepared to act if inflation was persistently and materially above its 2% target.
Investors were cautiously optimistic ahead of Powell’s second round of testimony later in the day.
“Powell provided a more dovish than anticipated testimony to Congress… we continue to expect the Fed will announce its intention to begin tapering its asset purchases in the September meeting and start tapering in October,” Commonwealth Bank of Australia (OTC:CMWAY) strategist Kim Mundy said in a note.