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Asia Pacific shares blended; Traders are watching the Chinese language yuan after the central financial institution strikes

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SINGAPORE – Asia Pacific stocks were mixed on Monday morning as investors watched the Chinese yuan move.

In Japan, the Nikkei 225 was down 0.44% while the Topix index was down 0.43%. South Korea's Kospi, on the other hand, rose 0.22% as stocks returned to trading after a Friday vacation.

In Australia, stocks were lower, with the S & P / ASX 200 falling 0.11%.

MSCI's broadest index for stocks in the Asia-Pacific region outside of Japan rose approximately 0.1%.

Chinese yuan clock

Investors will monitor the yuan's movements on Monday after the People's Bank of China announced a rule change that made it cheaper to sell the yuan.

Traders close the yuan when they expect the currency to weaken in the future. One way to do this is to borrow in yuan, hoping to buy it back later at a lower price and pocket the difference.

The central bank announced on Saturday that as of Monday, financial institutions will no longer need to set aside cash to conduct currency forwards. Previously, according to Reuters, financial institutions had to set aside 20% of the previous month's yuan forward settlement amount as foreign exchange risk reserves.

The offshore yuan was last traded at 6.7291 per dollar after strengthening in recent months.

National Australia Bank's Tapas Strickland said the yuan's movement was likely due to the rule change "which makes it cheaper to sell the (Chinese yuan) and less signals (concerns) about currency weakness".

Oil prices are falling

Oil prices were lower on the morning of Asian trading hours and the international benchmark Brent crude oil futures fell 1.33% to $ 42.28 a barrel. The US crude oil futures were also down 1.28% to $ 40.08 a barrel.

The US dollar index, which tracks the greenback versus a basket of its peers, hit 93.131 after falling over 93.3 recently.

The Japanese yen was trading at 105.60 per dollar after rising above 105.9 against the greenback last week. The Australian dollar changed hands at $ 0.7216 after rising from $ 0.71 last week.

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Katherine Clark