Asian shares rose on Thursday on investor hopes for China’s emergence from the COVID-19 pandemic, while the dollar stayed under pressure even as the U.S. Federal Reserve had a warning against market bets on interest rate cuts this year.
MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) rose 1% to touch a four-month high in morning trade. Japan’s Nikkei (.N225) bounced off a three-month low.
China has abruptly dropped ultra-strict curbs on travel and activity, unleashing the virus on the nation’s 1.4 billion people. Many funeral homes and hospitals say they are overwhelmed, but investors hope that once the infection waves pass, life and spending can return to normal and are looking beyond the most immediate difficulties.
“China reopening has a big impact…worldwide,” said Joanne Goh, an investment strategist at DBS Bank in Singapore, since it not only spurs tourism and consumption but can ease some of the supply-chain crunches seen during 2022.
“There will be hiccups on the way,” Goh said, during an outlook presentation to reporters. “We give it six months adjusting to the process. But we don’t think it’s reversible.”
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