Asian markets calmer as the yuan steadies, central banks cut rates

Asian markets were calmer Wednesday as central banks across the region moved aggressively to shore up slowing economic growth. Currency fears took a back seat despite China fixing the yuan at another new 11-year low within a whisker of the symbolically important 7 to the dollar level. China’s Shanghai Composite Index ended down 0.3%, marking a sixth consecutive day of declines. Japan’s Nikkei lost 0.3%, extending its losing streak to a fourth straight day. South Korea’s Kospi dropped 0.4%, down for a sixth straight session. Hong Kong’s Hang Seng (HSI) Index inched up 0.1% following five days of losses. A trio of central banks all cut interest rates Wednesday — a sign of how countries in the region are trying to protect their economies from a global downturn. The Reserve Bank of India slashed its key lending rate to the lowest level in nine years, a move the central bank said was needed to boost growth and private investment. New Zealand’s central bank also made aggressive cuts, putting its official cash rate at a record low of 1%. The Bank of Thailand cut rates, too. The US-China trade war continues to be a key concern, though markets aren’t nearly as rattled as they were earlier this week. The People’s Bank of China on Wednesday once again cut the yuan’s daily reference rate, which is a “band” it sets every day to limit how far up or down the yuan’s value can move. The rate was set at 6.9996 yuan per one US dollar, the lowest since May 2008. The central bank’s new reference rate is just a touch away from 7 yuan to one dollar — a psychologically important benchmark. One dollar now buys about 7.05 yuan in trading in China. In trading outside of China, where the yuan moves more freely, one dollar can buy about 7.07 yuan, slightly stronger than earlier this week. The Chinese central bank’s move indicates that it is trying to guide the gradual depreciation of the yuan, Ken Cheung Kin Tai, chief Asian foreign exchange strategist for Mizuho Bank in Hong Kong. Here are some of the other big moves on Asian markets.