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  4. HK stocks rally as Tokyo moves to tackle inflation

    Asian stocks mostly rose on Friday in line with a rally on Wall Street as a tumble in oil prices eased inflation concerns, while the yen dropped against the US dollar even after the Bank of Japan hiked interest rates to a three-decade high. In Hong Kong, the benchmark Hang Seng Index ended 146 points, or 0.6 percent, higher at 24,750 on turnover of HK$266.51 billion. The tech index surged 94 points, or 2.2 percent, to 4,405 while the China enterprises index was 50 points, or 0.6 percent, up at 8,225. Up north, the benchmark Shanghai Composite Index ended up 36 points, or 0.94 percent, at 3,911. The Shenzhen Component Index jumped almost 231 points, or 1.72 percent, up to 13,640 while the ChiNext Index surged 74 points, or 2.25 percent, to 3,372. In Tokyo, the Nikkei rose 882 points, or 1.38 percent, to 65,018 after the Bank of Japan raised the benchmark interest rates to 1.25 percent, a 31-year high, from one percent. Japan's Nikkei was also helped by a drop in the yen against the dollar that came in the wake of the BoJ's well-telegraphed decision to lift rates to their highest level since 1995. Pressure has increased on Japanese officials to further tighten monetary policy as a spike in oil prices caused by the Middle East crisis – which shows little sign of ending anytime soon – is expected to keep putting a floor under inflation. "Given that underlying CPI inflation has been approaching two percent and financial conditions have been accommodative, the bank will continue to raise the policy interest rate," the Bank of Japan said on its website. But the yen slipped to more than 157 to the greenback, compared with around 156 earlier. Stephen Innes at Quintex Intel suggested traders were jolted by the fact that the hike was not unanimous, passing by a 7-2 majority. "For a market looking for evidence that the Bank of Japan could shorten the distance between hikes, those dissents mattered," he wrote. "Traders were looking for signs that the bank could move faster from here, yet two members were already arguing that even today's move had come too soon." In Seoul, the Kospi ended 178 points, or 2.66 percent, up at 6,894, as chipmakers tracked an overnight rally in US peers, but still finished the week 0.2 percent lower amid worries about high bond yields. The gains came after US Federal Reserve's lift in borrowing costs this week provided some relief to traders concerned that policymakers were not moving quick enough to address a spike in inflation that could deal a blow to the world's top economy. That has been helped by news that Saudi Arabia was moving to restore within days about half of crude shipments disrupted by the stoppage of its East-West pipeline to the Red Sea. The conduit, even more important since the effective closure of the Strait of Hormuz by Iran, was shut last week after being targeted by Yemen's Iran-backed Houthis. Crude prices, which had soared around a fifth in September, have fallen sharply over the past three days, with West Texas Intermediate dipping below US$100. Brent and WTI lost more than two percent on Friday. The surge in oil this month has been among the main catalysts for rising inflation since the United States and Israel started attacking Iran at the end of February. (AFP/Xinhua) Edited by Tony Sabine

  5. Govt looking at ways to expand renminbi usage: Hui

    Secretary for Financial Services and the Treasury, Christopher Hui, on Friday said the government would explore more ways in which the renminbi could be used to handle payments. This, he added, was a "natural" process to promote the use of the national currency, while serving as a way to hedge against exchange rate-related risks. On Wednesday, Chief Executive John Lee announced in his Policy Address that the government would further promote the use and globalisation of the yuan. Speaking to reporters, Hui said government had already been taking in renminbi via different channels such as the issuance of yuan-denominated bonds. Authorities were also pressing ahead with plans to allow residents to use renminbi to pay for stock stamp duties, and include RMB counters under the Southbound Stock Connect Scheme to encourage more renminbi transactions, he added. "So you see, in terms of the recipient side, the government has already been collecting, and will collect more of the renminbi via different scenarios. "And that's why we also need to explore more use cases to spend the renminbi, so we'll not need to consider about issues related to exchange rates, such as the rate-matching issues," he said. Hui added the government would look into scenarios, such as using the renminbi to handle payments on projects related to water imports, or training sessions if it involves mainland institutions. "Actually we have been doing that, it's just that the amount involved might not be very large. "So from my perspective, I think it's about making a balance between the receivables and payables. And it's a natural and logical process," he added. Hui also said the Hong Kong Exchanges and Clearing would announce details this year of new renminbi-denominated, physically settled gold futures contracts, as investors increasingly seek more diversified products. Apart from settling government payments in yuan for mainland services, the government would also expand financial services using the yuan, including for short-term financing needs, according to the Policy Address. The Hong Kong Monetary Authority will also link the Faster Payment System (FPS) with UnionPay, allowing people to make purchases in yuan. Edited by Tony Sabine

  6. Why Europe Really, Really Needs a Mild Winter

    The economy has been resilient despite higher prices stemming from the war in the Middle East, but that could change quickly if cold weather forces countries to tap depleted gas reserves.