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Asia: Stocks slip, yuan fluctuates on virus news

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Stocks slipped across the Asia Pacific on Monday as investors continued trying to gauge when economic activity might rebound after the hit from the novel coronavirus.

[SYDNEY] Stocks slipped across the Asia Pacific on Monday as investors continued trying to gauge when economic activity might rebound after the hit from the novel coronavirus.

Benchmarks in Hong Kong, Tokyo and Seoul were lower, though moves eased following a report that Apple Inc's main manufacturer got a green light to resume some production. That erased declines in US equity futures. The Australian dollar climbed and the yuan rose past 7 per dollar offshore. Treasuries were flat, while oil traded around US$50 a barrel in New York.

With cases outside of China continuing to increase, investors will be monitoring whether the rate of change kicks up a gear. Meantime, monetary authorities across emerging markets have stepped in. The People's Bank of China moved to keep liquidity ample on Monday through reverse-repurchase agreements.

"This coronavirus seems to be going on for longer, is infecting more people and the hit to growth will be longer," Diana Mousina, an economist at AMP Capital Investors told Bloomberg TV in Sydney. "You won't be able to recoup all of the negative impacts in the first quarter."

KEY EVENTS COMING UP:

Earnings season continues with reports including: Alibaba, Softbank, Nissan, Airbus, Nestle and AIG.

Federal Reserve Chairman Jerome Powell delivers his semi-annual testimony in Congress on Tuesday and Wednesday.

Thursday brings a gauge of underlying US inflation, the core consumer price index. It's expected to increase to 0.2 per cent in January, a faster pace than in December.

China and the US on Friday lower tariffs on billions of dollars of respective imports, as part of the trade deal signed last month.

STOCKS

Japan's Topix index dropped 0.8 per cent as of 2.21pm in Tokyo. The Shanghai Composite Index slid 0.1 per cent, and Hong Kong's Hang Seng Index declined 0.7 per cent. South Korea's Kospi index retreated 0.8 per cent.

CURRENCIES

The yen was little changed at 109.75 per US dollar.

The offshore yuan ticked up 0.2 per cent to 6.9936 per US dollar.

The euro bought US$1.0956, little changed.

The Australian dollar gained 0.4 per cent to 66.97 US cents.

The Bloomberg Dollar Spot Index slipped 0.1 per cent.

BONDS

The yield on 10-year Treasuries was steady at 1.58 per cent, while Australia's 10-year yield declined three basis points to 1.01 per cent.

COMMODITIES

West Texas Intermediate crude oil fell 0.1 per cent to US$50.28 a barrel.

Meanwhile, gold was little changed at US$1,571.47 an ounce.

BLOOMBERG