Asian equities rose on Tuesday, with Shanghai and Japanese stocks closing at multi-year highs on hopes of Chinese stimulus and as investors dismissed Japan's rating downgrade.
Reuters reported late in the session that the People's Bank of China may unveil a cut in the reserve requirements for banks on the back of recent weak data. Official factory activity data earlier this week fell to an eight-month low, prompting talk of further aggressive intervention from authorities.
"It remains be seen if Moody's critiques have any merit. The ratings agencies have been notoriously wrong in their economic assessments of G-3. There are several reasons to be more optimistic about Japan's near-term prospects including the sharp fall in energy price and the rise in the exchange rate," Boris Schlossberg, managing director of FX strategy at BK Asset Management, said in a note.