eBusiness Weekly
SYDNEY – The dollar hovered near 3-week highs on Tuesday and Asian shares gained as U.S. President Donald Trump and North Korean leader Kim Jong Un signed a ‘comprehensive’ deal at a historic summit aimed at the denuclearization of the Korean peninsula.
Trump said the process of denuclearization would happen “very, very quickly”, adding he had formed a “special bond” with Kim and the relationship with North Korea would be very different.
“The letter that we’re signing is very comprehensive and I think both sides are going to be very impressed with the result,” Trump said after a “really very positive” summit meeting in Singapore.
“A lot of goodwill went into this, a lot of work, a lot of preparation.” Both leaders are set to hold a press conference later.
The dollar rose against the safe-haven yen, while the Korean won pared gains to stay near a recent two-week trough. Spreadbetters pointed to a firm start for Europe while E-Minis for the S&P 500 ESc1 also gained 0.1 percent.
Kim had earlier said the meeting was “a good prelude to peace”, just months after the two leaders traded insults and tensions spiraled in the region over the reclusive regime’s nuclear programs.
Yet, there was some unease among investors about the outcome of the talks given the tense relations between the two nations. The combatants of the 1950-53 Korean War are technically still at war, as the conflict, in which millions of people died, was concluded only with a truce.
In Asian equity markets, trading was volatile with Japan’s Nikkei paring early gains to close 0.3 percent higher after earlier rising as much as 0.9 percent.
MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS seesawed between positive and negative territory, and was last up 0.15 percent. South Korean shares were a tad weaker while Chinese shares were buoyant after starting in the red. The blue-chip CSI 300 index jumped about 1.3 percent.
“The peace on the Korean peninsula could deliver significant benefits to both North and South Korea, including potentially a re-rating for South Korean stocks,” analysts at Singapore’s DBS said in a note. “The landmark summit meeting should help to remove a major tail risk for the region’s markets and economies,” they added.
“However, it would be prudent to contain excessive optimism, given the enormous gulf between the two Koreas and the costs of reunification.” – Reuters
