Asian stocks extended early gains on Wednesday after a raft of upbeat Chinese data reassured anxious investors after a stock market rout there had heightened worries of a potentially damaging blow to the world’s second-largest economy.
MSCI’s broadest index of Asia-Pacific shares outside Japan added 0.4 percent, though its upside was tempered as Chinese shares were lower in early trade.
Investors were also awaiting other key events, including a Bank of Japan policy decision and congressional testimony by the US Federal Reserve chief.
China’s second quarter gross domestic product grew an annual 7.0 percent, steady with the previous quarter and slightly better than analyst forecasts. Fixed-asset investment and industrial output growth also beat economists’ forecasts.
“It’s a little bit better than expectations. We had expected 6.8 (percent year-on-year), said Louis Kuijs, chief China economist at RBS in Hong Kong.
“The higher frequency data suggests that indeed…we can start to talk about growth seeming to have bottomed out.”
Further stimulus is still expected after the quarter ended with a savage correction that shaved about 30 percent off share market value since last month, before Beijing’s support steps stemmed the freefall.
Chinese shares were lower in early trade, with Shanghai’s benchmark composite index down 1.4 percent, and the CSI300 index of the largest listed companies in Shanghai and Shenzhen falling 1.2 percent.
Japan’s Nikkei stock index advanced 0.5 percent, bolstered by a weaker Japanese currency.
The Bank of Japan’s regular policy decision is likely to emerge between 0230-0500 GMT, with no shift expected. Governor Haruhiko Kuroda will speak at 0630 GMT.
Later on Wednesday, Greece will take the spotlight as Athens will vote on a sweeping austerity package to secure the funding it needs to stem its fiscal crisis and remain in the euro zone.
Congressional testimony by Federal Reserve Chair Janet Yellen later in the session Wednesday will be closely monitored for any further hints regarding the timing of a U.S. interest rate hike, particularly after a surprise fall in US retail sales on Tuesday.
Core retail sales slipped 0.1 percent, much worse than economists’ forecasts for a 0.4 percent rise.
The unexpected drop backed the view that the Fed might hold off on hiking rates, which gave Wall Street a lift. All three major indexes ended higher.
“People are not taking any aggressive positions ahead of Yellen. Some people are buying the dollar on dips,” said Kaneo Ogino, director at foreign exchange research firm Global-info Co in Tokyo.
The upbeat Chinese data pushed up Treasury yields, which in turn lifted on the dollar. The yield on benchmark 10-year notes was last at 2.406 percent, up from its U.S. close of 2.399 percent on Tuesday.
The dollar edged up about 0.1 percent on the day to 123.46 yen, while the euro edged about 0.1 percent lower to $1.0998.
Crude futures were higher after it became apparent that a nuclear deal between Tehran and six global powers will not immediately remove sanctions placed on Iranian crude exports.
US crude was up about 0.4 percent at $53.26 a barrel.