By Gina Lee
Investing.com – Asia Pacific stocks were mostly up on Thursday morning with investors digesting 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 inched down 0.10% by 10:10 PM ET (2:10 AM GMT) while the inched up 0.03%. Data released earlier in the day said China’s second-quarter GDP grew 7.9% and 1.3% . It also said industrial production grew 8.3% year-on-year in June and that the 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 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 was up 0.26% with the 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 grew 39.8% year-on-year, grew 40.7% year-on-year and the 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.
Japan’s 225 fell 0.85%, ahead of the policy decision to be handed down on Friday.
In Australia, the inched up 0.03% over lower-than-expected labor data for June released earlier in the day. The was a lower-than-expected 29,100 and the was 51,600 while the 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:) strategist Kim Mundy said in a note.
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