Asia stocks rallied on Monday as the U.S. dollar rebounded and oil fell below $134 a barrel, boosting confidence in the region’s exporters, but bonds fell on expectations central banks will raise rates to fight inflation.
Oil prices declined by $1 to $133.86 a barrel after United Nations Secretary General Ban Ki-moon said Saudi Arabia, the world’s largest crude exporter, had told him it will boost output to the fastest in decades.
Along with U.S. inflation data that showed underlying price pressures rose moderately in May, and the biggest weekly rise in the U.S. dollar in three years, the easing in crude prices improved the prospects of some of Asia’s well-known exporters such as Canon in Japan and Samsung Electronics in South Korea.
“A softer yen sparked hopes for upward earnings revisions for some exporters,” said Takahiko Murai, general manager of equities at Nozomi Securities in Tokyo.
“But we have to brace for an eventual dramatic slowdown in Japan, where the stock market and the economy depend on overseas demand, considering the recent declines in Asian shares and rising inflation worries in emerging countries.” … read this article
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