Asian shares mixed as oil prices fall back; China cuts rate

BANGKOK (AP) — Shares were mixed in Asia on Monday after China cut a key interest rate to help cushion the impact of the pandemic on its economy.

Benchmarks rose Monday in Hong Kong and Shanghai but fell in Tokyo. Oil prices were lower.

A fresh crop of grim economic data is expected this week after a worldwide rally on Friday that pushed the S&P 500 up 2.7%.

Japan reported Monday that its exports fell nearly 12% in March from a year earlier as shipments to its two biggest markets, the U.S. and China, slipped.

Providing a lift for Chinese markets, banks cut the benchmark interest rate, called the 1-year loan prime rate, by 0.20 basis points to 3.85%, seeking to boost the economy after it contracted by 6.8% in the first quarter of the year.

The 5-year loan prime rate was cut by 10 basis points to 4.65%. The cuts came as no surprise given the economic shock of the last quarter, the worst downturn since perhaps the 1965-75 Cultural Revolution.

The People's Bank of China paved the way for the monetary easing last week by reducing by 0.2% a rate called the medium term lending facility, which forms the basis for the loan prime rate. The cuts reduce short-term borrowing costs for banks.

China's central bank has used various targeted moves to ease the pandemic's blow to the economy. “As employment conditions remain weak and external demand is being held back by lockdowns elsewhere in the world, we think the People’s Bank will take further steps to prop up activity," economists at Capital Economics said in a commentary.

The Hang Seng index in Hong Kong gained 0.2% to 24,419.99 while the Shanghai Composite index added 0.3% to 2,847.13. Shares also rose in South Korea, gaining 0.2% to 1,919.14.

But Japan's Nikkei 225 index gave up 0.9% to 19,713.77, while the...