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People are reflected on the electronic board of a securities firm in Tokyo, Tuesday, April 2, 2019.

Koji Sasahara/The Associated Press

Asian share markets swung higher on Wednesday as a raft of Chinese data easily beat expectations in a sign Beijing’s policy stimulus may finally be gaining traction in the world’s second-largest economy.

Investors were hoping for better news from China and were not disappointed with first-quarter economic growth pipping forecast at 6.4 per cent.

More importantly industrial output surged 8.5 per cent in March from a year earlier, blowing away forecasts of a 5.9 per cent increase. Retail sales also pleased with a rise of 8.7 per cent.

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Investors reacted immediately by buying the Australian dollar, often a liquid proxy for China plays, which pushed up 0.3 per cent to a two-month top at $0.7206.

Japan’s Nikkei added 0.5 per cent to reach its highest in almost five months, while E-Mini futures for the S&P 500 rose 0.2 per cent.

MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.2 per cent to near its highest since July.

“This suggests that policy measures introduced by Chinese officials last year are now bearing fruit,” said Rodrigo Catril, a senior forex strategist at National Australia Bank.

“We had positive surprises on credit data and housing data last week and now GDP has come in better than expectations, which is building the case that a recovery is on the way,” he added. “We see the revival of the Chinese economy as a necessary condition for an improvement in global growth outlook.”

In currency markets, the dollar finally managed to top resistance on the yen at 112.13 to reach its highest since December at 112.16. It was last at 112.02.

The dollar was flat on a basket of currencies at 96.991 , still within the 95.00 to 97.70 range that has held for the past six months.

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The euro edged up a touch to $1.1298, having slipped form $1.1314 overnight on a Reuters report that several European Central Bank policy-makers think the bank’s economic projections are too optimistic.

One currency on the move was the New Zealand dollar which sank as far as $0.6668 after annual consumer price inflation came in well below expectations at just 1.5 per cent for the first quarter.

Yields on two-year bonds dived 9 basis points to 1.48 per cent as investors wagered the Reserve Bank of New Zealand (RBNZ) would have to cut rates in response.

The improved Chinese data later gave it a helping hand back up to $0.6723.

In commodity markets, the general improvement in risk sentiment saw spot gold slip to its lowest for the year so far and was last at $1,276.61 per ounce.

Oil prices were buoyed as fighting in Libya and falling Venezuelan and Iranian exports raised concerns over tightening global supply.

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U.S. crude was last up 48 cents at $64.53 a barrel, while Brent crude futures rose 27 cents to $71.99.

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