Asia-Pacific Markets Advance as China and Australia Ease Monetary Policies
Asia-Pacific markets saw gains on Tuesday as investors reacted to key monetary policy decisions in China and Australia aimed at supporting their respective economies amid broader global uncertainties.
China’s central bank, the People’s Bank of China (PBOC), lowered its key lending benchmarks by 10 basis points in a widely anticipated move. The one-year loan prime rate (LPR) was reduced to 3.0% from 3.1%, while the five-year LPR — a key reference for mortgages — dropped to 3.5% from 3.6%. This marks the first LPR cut since October and follows a broader easing effort by the PBOC earlier in the month.
The rate adjustments are part of Beijing’s broader strategy to stimulate domestic lending and consumption as trade tensions, particularly with the United States, continue to cloud the economic outlook. In tandem with the lending rate cuts, major state-owned banks also reduced deposit rates by 5–25 basis points to help preserve profit margins and encourage lending.
Markets across the region responded positively. Hong Kong’s Hang Seng Index rose 1.49% to 23,681.48, while mainland China’s CSI 300 index climbed 0.57% to 3,899.37. Banking stocks were among the notable gainers, with the CSI Bank Index up 0.7%.
In Japan, the Nikkei 225 edged up 0.08% to 37,529.49, and the broader Topix gained 0.02% to 2,738.83. South Korea’s Kospi closed flat at 2,601.80, but the tech-heavy Kosdaq rose 0.25% to 715.55.
Australia’s S&P/ASX 200 rose 0.58% to finish at 8,343.3 after the Reserve Bank of Australia (RBA) cut its policy rate by 25 basis points to 3.85%. The move comes as inflation in Australia eases, with first-quarter headline inflation dropping to a four-year low of 2.4%. The RBA reiterated its commitment to returning inflation to its 2–3% target range over time.
Investors are also watching the debut performance of Contemporary Amperex Technology (CATL), the world’s largest battery maker, which surged more than 11% in its Hong Kong trading debut.
Globally, US markets remained relatively stable. Futures for the S&P 500 and Nasdaq 100 were little changed, while Dow Jones Industrial Average futures rose slightly. On Monday, all three major US indices closed higher, continuing a positive streak amid easing Treasury yields and despite recent concerns over credit ratings.
While China’s latest rate cuts may provide near-term support to the economy, analysts caution that the broader economic outlook remains complex. Growth in the property sector has stagnated, and consumer sentiment remains subdued despite easing financial conditions. Economists suggest further stimulus measures may be required if Beijing aims to reach its 5% growth target for the year.
