SINGAPORE — Stocks in Asia-Pacific were higher in Tuesday trade as the Reserve Bank of Australia’s lowered its cash rate target.

Hong Kong’s Hang Seng index jumped around 2% in morning trade. Mainland Chinese stocks were also higher, with the Shanghai composite gaining 1.13% while the Shenzhen component added 0.897%.

South Korea’s Kospi also added 1.7%. In Australia, the S&P/ASX 200 in Australia gained more than 2%.

MSCI’s broadest index of Asia-Pacific shares outside Japan traded 1.12% higher.

Japan markets are closed for a holiday on Tuesday.

The moves in Asia-Pacific came as the Reserve Bank of Australia reduced its cash rate target to 0.1%.

Following the RBA announcement, the Australian dollar changed hands at $0.7038, compared to an earlier high of $0.7062.

“The cash rate is now really as close to negative as it can be,” Paul Bloxham, chief economist for Australia, New Zealand and global commodities at HSBC, told CNBC’s “Street Signs Asia” moments after the central bank’s decision was announced.

“This is as far as the cash rate goes down without being negative,” Bloxham said, citing past public comments from the Reserve Bank governor that negative rates are “extraordinarily unlikely.”

The upcoming U.S. presidential election between incumbent Donald Trump and former Vice President Joe Biden also weighed on investor sentiment.

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 93.965 after seeing an earlier high of 94.051.

The Japanese yen traded at 104.72 per dollar after seeing levels above 104.8 against the greenback yesterday.

Oil prices were little changed in the morning of Asian trading hours, with international benchmark Brent crude futures down about 0.1% to $38.94 per barrel. U.S. crude futures were slightly higher at $36.83 per barrel.