Asian Markets Advance As China Drops Travel Quarantine

Asian stocks advanced on Tuesday after China said it would drop quarantine requirements for international arrivals beginning January 8 in a major step towards reopening its borders and marking another shift from its so-called zero-Covid policy.

Investors also digested a slew of economic data from Japan and awaited the release of the Bank of Japan’s summary of opinions of the December 19-20 meeting due Wednesday for directional cues.

Chinese shares rose sharply as investor optimism over the scrapping of the quarantine requirement offset weak industrial profits data released earlier in the day. The benchmark Shanghai Composite Index rallied 1.0 percent to close at 3,095.57.

China’s industrial profits declined at a faster rate in the January to November period, as slowing demand and the resurgence of COVID cases weighed on industrial activity, official data showed.

Industrial profits decreased 3.6 percent in the January to November period, which was bigger than the 3.0 percent decline in January to October.

Japanese shares finished modestly higher, touching a one-week high, led by gains in the retail and travel sectors.

The Nikkei 225 Index edged up 0.2 percent to 26,447.87, as the latest readings on unemployment, housing starts and retail sales proved to be a mixed bag. The broader Topix ended 0.4 percent higher at 1,910.15.

Takashimaya soared 7.1 percent after the department-store operator boosted its fiscal-year earnings guidance.

Japan Airlines climbed 2.2 percent and ANA Holdings added 1.4 percent as China’s plan to lift Covid quarantine requirements raised hopes for a return of big-spending Chinese tourists.

Financials also performed well after the Bank of Japan raised the policy ceiling for long-term yields in an unexpected hawkish shift last week.

Seoul stocks ended higher for a second day running on hopes for China’s reopening. The Kospi climbed 0.7 percent to 2,332.79.

Cosmetic giant Amorepacific jumped 6.4 percent on hopes for the revival of the world’s second-largest economy.

Markets in Australia, New Zealand and Hong Kong were closed for holidays. India’s Sensex was up 0.2 percent in choppy trading.

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