Asian stocks were mostly higher on Monday, shrugging off yet another anti-inflation move by China after encouraging news about the U.S. economy.
Japan’s Nikkei 225 index bucked the trend to fall 0.2 percent to 9,573.04. Shares of Toyota Motor Corp. were down 0.3 percent as it remained unclear when the automaker would resume full production in Japan.
Although the company announced it had resumed production at all of its plants in Japan for the first time since last month’s massive earthquake and tsunami, plants were operating at only half-capacity due to parts shortages.
Better than expected economic figures out of the U.S. gave markets the verve to shrug off another move by China’s central bank to tamp down inflation.
The Federal Reserve reported late last week that U.S. factories increased production for the ninth straight month. Separately, the Labor Department said consumer prices rose just 0.1 percent last month excluding food and gas prices - lower than economists were expecting. Consumer confidence also gained.
Hong Kong’s Hang Seng index rose 0.5 percent to 24,132.11, and South Korea’s Kospi was up 0.2 percent to 2,142.86. Australia’s S&P/ASX 200 added 0.6 percent to 4,881.20. Benchmarks in Singapore, Taiwan, Indonesia, the Philippines and New Zealand were also higher.
On Sunday, the People’s Bank of China announced that the deposit reserve ratio for most banks will be raised 0.5 percent, meaning large financial institutions will have to keep 20.5 percent of their deposits in reserve.
China’s inflation jumped to a 32-month high in March despite government efforts to cool an overheated economy, adding to pressure for more interest rate hikes and other controls. It was the fourth time this year that the central bank has raised the reserve ratio.
Such moves by China’s central bank often stymie investor sentiment on concerns that tighter monetary policy will hamper growth.
DBS Bank said the bank’s actions “reflect authorities alertness over inflation risk is still high. And this is a prelude to another interest rate hike soon.”
Benchmark crude for May delivery was down 68 cents to $108.98 a barrel in electronic trading on the New York Mercantile Exchange. The contract settled at $109.66 per barrel on Friday after rising as high as $110.10.
In currencies, the euro dropped to $1.4385 from $1.4436 in New York on Friday. The dollar dropped to 82.94 yen from 83.13 yen.
