Weekly News Summary for August 28 to September 3, 2020

Friday, Aug. 28, 2020: Japan’s PM Shinzo Abe Resigns Over Failing Health

Japan’s longest-serving Prime Minister Shinzo Abe announced his resignation on Friday due to poor health, stating that he did not want his illness to get in the way of decision making, apologized to the Japanese people for failing to complete his term in office.

The country’s benchmark Nikkei 225 index reacted negatively to the news as it dropped 1.4% to a two-week low, while the political uncertainty created by the announcement led the safe-haven yen to climb against the US dollar.

Monday, Aug. 31, 2020: China’s New Policies Complicate TikTok’s US Sale

ByteDance Ltd.’s plans to sell the US operations of its video-sharing social media app TikTok faced a new hurdle, after the Chinese government announced new restrictions on the export of artificial intelligence technology.

The new policies, which now is requiring companies to seek government approval – a process that may take up to 30 days, seemed to have provided Beijing an effective veto on the deal and turned the tables on the US.

Tuesday, Sept. 1, 2020: Euro Breaches $1.20 Mark on US dollar Sell-off

The euro breached the $1.20 mark for the first time in two years on Tuesday, while the US dollar hit a multi-year low as the Federal Reserve’s new approach to monetary policy prompted as traders to sell the greenback.

The euro rose to a 28-month high of $1.2011 before easing shortly after, while its optimism pushed the US dollar index down to a new 29-month low.

Wednesday, Sept. 2, 2020: Australia’s Economy in First Recession in 30 Years

Australia officially went into its first recession in nearly three decades during the second quarter of 2020, as its economy declined by 7.0% in the three months through June, weighed by weak Chinese demand for its iron ore and coal.

The data, however, did not prevent the Australian dollar from gaining 29% from its March low against its US counterpart and only shed 0.4% on the report, leaving the currency near a two-year high.

Thursday, Sept. 3, 2020: Asian Stocks Weaken on Growing China-US Tensions

Asian stocks reversed early gains on Thursday due to reports about China’s plans to revise policy to its semiconductor industry following the US’ new restrictions on senior Chinese diplomats’ travel.

With Chinese and Hong Kong equities leading the losses, MSCI’s broadest index of Asia-Pacific shares outside of Japan, which rose more than 0.5% earlier, shed 0.1%, while the Hang Seng index lost 0.3% and the blue-chip CSI300 dropped 0.5%.