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Nikkei Markets

Asian stocks flat as US removes China's currency manipulator tag

Investors also await phase-one trade deal signing

HONG KONG (Nikkei Markets) -- Asian shares outside of Japan ended little changed on Tuesday after rising earlier in the session as the U.S. removed China from a list of currency manipulators.

The Nikkei Asia300 index edged 0.01% higher to close at 1,429.04.

The gauge had earlier climbed to near 1,438, boosted by the U.S. decision to lift China's currency manipulator tag which it had imposed last August after the Chinese yuan dropped below 7 to a dollar.

In its latest semiannual currency report, the U.S. Treasury said as part of the phase-one trade deal, China made enforceable commitments to refrain from competitive devaluation of its currency and agreed to publish relevant data on exchange rates and external balances.

The removal of the tag was another indication of improving trade ties between the two countries. The two sides are expected to sign the preliminary trade deal on Wednesday, and talks regarding a broader deal are expected to begin shortly thereafter.

Jingyi Pan, a market strategist at IG Asia, said the U.S. Treasury's action was one more "olive branch offered" by Washington and provided "another injection of market optimism ahead of the phase-one trade deal signing."

An index of Chinese companies listed in Hong Kong, the Hang Seng China Enterprises Index, slipped 0.4% after posting fresh seven-month highs earlier in the session.

Electric carmaker BYD added 0.3% after surging 15.9% yesterday on the back of indications that China will not cut subsidies on electric vehicles.

Tencent Holdings fell 1.5%. China Petroleum & Chemical (Sinopec), down 1.1%, led energy names lower after Brent crude yesterday dropped to a one-month low.

Dongfeng Motor Group declined 1.4% following a 7.4% decrease in December sales volume.

China Telecom advanced 1.3% and Ping An Insurance Group added 0.9%.

Singapore Press Holdings slipped 1.8% following a 17.2% drop in first-quarter net profit. Astro Malaysia Holdings declined 3.1%. Local broker Affin Hwang Investment Bank downgraded the shares of the Malaysian media and entertainment company, saying that the downtrend in Astro's pay-TV revenue was unlikely to wane in the near term.

Meanwhile, China reported Tuesday that dollar-denominated exports rose 7.6% last month from a year-earlier period and imports increased 16.3%. Economists polled by Reuters had expected a 3.2% growth in exports and a 9.6% increase in imports.

--Nimesh Vora

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