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Asian Markets Mostly High as Australian Reserve Bank Maintains Rates

Stocks in Asia Pacific traded higher Tuesday afternoon as the Reserve Bank of Australia’s (RBA) kept its policy settings unchanged.

The S&P/ASX 200 in Australia surged 1.87%. Australia’s retail sales data for June rose 2.7% month-on-month on a seasonally adjusted basis, according to data released Tuesday by the Australian Bureau of Statistics. That was higher than expectations of a 2.4% increase in a Reuters poll.

Japanese stocks, which led gains among the region’s major markets on Monday, also continued to move upward in Tuesday afternoon trade. The Nikkei 225 gained 1.63% while the Topix index advanced 1.89%. South Korea’s Kospi gained 1.1%.

Mainland Chinese stocks were mixed by the afternoon, with Shanghai composite fractionally higher while the Shenzhen component dipped 0.584%. The Hang Seng index in Hong Kong advanced 0.83%.

Overall, the MSCI Asia ex-Japan index rose 1.01%.

The Australian central bank on Tuesday announced its decision to maintain the current policy settings. That came as social distancing measures have been ramped up in the Australian state of Victoria to contain the coronavirus.

RBA Governor Philip Lowe said in a media release announcing the monetary policy decision that the recovery in the Australian economy is “likely to be both uneven and bumpy,” acknowledging that the coronavirus outbreak in Victoria is having a “major effect” on the state’s economy.

Meanwhile, lawmakers stateside remained at an impasse regarding the next coronavirus stimulus package, with the main sticking point continuing to be the federal boost to unemployment assistance.

“What’s really important … for the Asian economies is Chinese growth and U.S. growth and digging into that a bit deeper, what’s really critical is … consumer-led growth … in both of those markets,” Isaac Poole, chief investment officer at Oreana Financial Services, told reporters on Tuesday.

“That is why the unemployment benefits story … in the U.S. is so critical,” Poole said. “Without it, we’re going to see consumer spending fall off a cliff. That’s going to really dial back the engine of global growth in this recovery.”

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 93.49 after an earlier low of 93.467.

The Japanese yen traded at 106.08 per dollar after weakening from levels around 105.6 against the greenback yesterday. The Australian dollar was at $0.7133 after falling below $0.71 yesterday.

Oil prices were lower in the afternoon of Asian trading hours, with international benchmark Brent crude futures down around 0.7% to $43.83 per barrel. The U.S. crude futures also dipped 0.68% to $40.73 per barrel.