Asian Stocks Up, China Releases Disappointing Data and Ukraine

© Reuters.

By Gina Lee

Investing.com – Asia Pacific stocks were up on Wednesday morning, with investors digesting the . is on a downward trend as the prospect of conflict over Ukraine subsided somewhat after Russia said it would withdraw some forces.

China’s rose 0.69% by 9:31 PM ET (2:31 AM GMT) while the gained 0.60%. Data released earlier in the day showed that China’s consumer price index grew 0.9% and 0.4% in January. The rose 0.9% year-on-year.

Hong Kong’s rose 1.34%.

Japan’s jumped 2.04% South Korea’s rose 1.59%. In Australia, the gained 0.60%.

Russia announced on Tuesday that it would partially pull back thousands of troops currently stationed near the border with Ukraine and appeared to signal its preference for a diplomatic solution to the situation.

Safe havens sold off on Tuesday in reaction to the announcement, with the 30-year U.S. Treasury yield rising to its highest level since May 2021. Bonds in Australia and New Zealand also retreated.

However, U.S. President Joe Biden said his country has yet to verify that any Russian troops have been pulled back, maintaining that an invasion of Ukraine is still possible.

Russian troops remain in a “threatening position,” Biden argued, but he agreed with Monday’s Russian declaration that diplomacy is still possible. However, he would not “sacrifice basic principles” that countries, including Ukraine, should have the right to keep their own borders.

The crisis in Ukraine added more volatility into a market already jittery over the prospect of aggressive interest rate hikes from central banks.

“Volatility and uncertainty are just going to be heightened, that can be due to Russia-Ukraine, it could be due to stubborn inflation,” UBS financial advisor Brenda O’Connor Juanas told Bloomberg.

“There is a lot more for clients and investors to be uncertain about.”

However, the latest Russian comments are a hopeful sign and assets like the ruble and Russian stocks have recovery potential, Macro-Advisory Ltd. founder and senior partner Christopher Weafer told Bloomberg.

“But frankly after several months of high risk and speculation, it’s going to take several weeks for people to get comfortable with that, no matter what happens in the next couple of days,” he said.

Investors now await the , due later in the day. Cleveland Fed President Loretta Mester and St. Louis Fed President James Bullard will speak on Thursday, with more officials, including Charles Evans, Christopher Waller, and Lael Brainard, speaking at the U.S. Monetary Policy Forum a day later.

G-20 finance ministers and central bank governors will also meet from Feb. 17 to 18.