The currency edged higher after the People’s Bank of China kept the reference rate little changed for the fourth day in a row.
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Energy firms’ shares have taken a hit, with Freeport-McMoRan and Marathon Oil among the worst performing stocks in the USA on Wednesday.
While many Western observers were pleasantly surprised with the data, somebody in China didn’t buy it. It was the stock market, down another 2.4 percent on January 13 and closing just 22 points above the August 2015 low of 2,927.
Tom Rafferty of the Economist Intelligence Unit, said: “China’s improved trade data in December will probably act to reassure global investors unnerved by the recent volatility in the country’s financial and foreign-exchange markets”. But analysts have been left guessing over how much lower it might go and the amount of foreign reserves China could burn through in efforts to moderate the currency’s decline.
Beijing will not set a numerical target for annual trade growth in 2016, the state-run China Economic Times newspaper reported earlier, saying that commerce minister Gao Hucheng told a meeting that the government would instead aim to have “higher export growth than the world trade growth level”.
China’s trade surplus increased in December, as exports dropped at a slower-than-expected pace, raising hopes that the depreciation in yuan is unlikely to continue notably on robust revenue from shipments. The Standard & Poor’s 500 index added 15.01 points, or 0.8 percent, to 1,938.68.
In the past, even when the yuan was stable against the dollar, it still strengthened against the greenback, but the central bank is meant to keep the renminbi stable against a basket of currencies, which would help exports, said Liu Dongliang, an economist at China Merchants Bank.
Also on the docket are Chinese trade data which usually come out around 1300 AEDT.
And Tokyo finally ended on a positive note after dropping for six straight sessions, gaining 2.9 percent. Yields on 10-year paper fell 6 basis points to 2.10 percent having touched a 10-week low. Traders were also cheered when the numbers were translated into the weakening local currency, the yuan, which showed exports reached a record value in December, up 2% on the previous year. For starters, the biggest contributor to the 3.5 percent increase in exports from November was Hong Kong, constituting 40 percent.
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Analysts said trading volume, however, was continuing to wane, signalling that many investors were staying on the sidelines or putting their money elsewhere. Global benchmark Brent settled down 1.8 percent on Wednesday at $30.31 a barrel, after falling as low as $29.96.
