BOJ Adjusts To Allow More Flexible Policy

Jul 31 18, 07:31 GMT

General Trend:

Asian equity markets trade mixed as traders digest the BoJ decision
Samsung Electronics expects H2 results to be driven by memory and flexible OLEDs
BoJ announced forward guidance, left yield curve control target unchanged; to raise purchases of ETFS which track the TOPIX (as speculated)
Japan JGB yields move lower in the aftermath of the BoJ rate decision: 40-year yield down over 8bps, near 0.88%
Japan jobless rate rises for the first time since Feb, job-to-applicant ratio hits highest level since 1974
Japan prelim June industrial production misses ests
China July official PMIs decline amid ‘trade war’
China central bank skipped open market operation for the 8th straight session
PBOC fixed the yuan slightly weaker
New Zealand July ANZ business confidence hits the lowest level since 2008
Rio Tinto expected to report H1 results on Wed
Apple is due to report Q3 results on Tuesday after the US close
Japanese companies which may report earnings include Honda, Sony, Nintendo, Panasonic, Renesas, Resona, Yamato Holdings, ANA Holdings, Japan Airlines, Kyocera, Takeda, JFE Holdings and Start Today

Headlines/Economic Data

Japan

Nikkei 225 opened -0.3%
(JP) BOJ TWEAKS POLICY TO ENHANCE FLEXIBILITY; adjusts ETF allocation (as speculated); Cuts amount to which negative rate applies, starts forward guidance
(JP) JAPAN JUN JOBLESS RATE: 2.4% V 2.3%E; Job-To-Applicant Ratio: 1.62 v 1.60e (highest level since January 1974)
(JP) JAPAN JUN PRELIM INDUSTRIAL PRODUCTION M/M: -2.1% V -0.3%E; Y/Y: -1.2% V 0.6%E
(JP) Japan 10-year JGB yield trades above 0.105% before BOJ
(JP) JAPAN JUN ANNUALIZED HOUSING STARTS: 915K V 960KE; Y/Y: -7.1% V -2.5%

Korea

Kospi opened -0.1%
(KR) Analysts note that downturn in South Korea economic indicators point to GDP being weaker in H2, which may make it hard to meet 2018 target of 2.9% – Korean press
(KR) South Korea Aug Business Survey: Manufacturing: 74 v 81 prior (17-month low); Non-manufacturing: 76 v 81 prior
(KR) South Korea Jun Industrial Production m/m: -0.6% v -0.9%e; y/y: -0.4% v 0.7%e
(KR) North Korea said to have built new missiles after summit with Trump – press
(KR) South Korea Jun Construction Output y/y: -7.7% v 0.0% prior
Samsung Electronics, 005930.KR Reports final Q2 (KRW) Net 11.0T v 11.1Te, Op 14.9T v 14.8T prelim, Rev 58.5T v 58.0T prelim
005930.KR Exec: Chip unit still focused on mid and long term profitability; FY19 will see memory chi[ market to remain stable, with strong server demand – conf call comments

China/Hong Kong

Hang Seng opened -0.2%, Shanghai Composite -0.1%
(CN) Yuan may fluctuate at low level in short term – China Securities Journal
(CN) CHINA JUL OFFICIAL GOVT MANUFACTURING PMI: 51.2 V 51.3E; NON-MANUFACTURING PMI: 54.0 V 54.9E (weakest reading since Aug 2017); COMPOSITE PMI 53.6 V 54.4 PRIOR
(CN) China PBoC Open Market Operation (OMO): Skips OMO for the 8th consecutive session; Net drains CNY30B v drains CNY130B prior
(CN) China PBoC sets yuan reference rate at 6.8165 v 6.8131 prior
(BR) Brazil Pres Temer: talked with China Pres Xi about barriers to sugar and poultry trade
(CN) China to raise penalties on illegal online finance – Chinese Press
(CN) China authorities are said to be slowing down rollout of China Depository Receipts (CDR) plan as companies are being slow to apply – financial press
(CN) Moody’s: Trade restrictions will contribute to slowdown in China growth, cutting real GDP growth by around 0.3-0.5 pct points in 2019; US/China trade dispute likely to escalate further in 2018 and impact global growth

Australia/New Zealand

ASX 200 opened +0.1%
FCG.NZ Reports Jul collections: New Zealand 13.3M v 11.8M y/y; Australia 9.9M v 8.7M y/y
(AU) AUSTRALIA JUN BUILDING APPROVALS M/M: 6.4% V 1.0%E; Y/Y: +1.6% V -6.0%E
(AU) Australia Foreign Min Bishop: Australia, Japan and US form partnership for infrastructure investment
(NZ) New Zealand Jun Building Permits m/m: -7.6% v +7.1% prior
(NZ) New Zealand Jul ANZ Activity Outlook: 3.8 v 9.4 prior; Business Confidence: -44.9 v -39.0 prior
(AU) Australia Jun HIA New Homes Sales m/m: +2.2% v -4.4% prior

Other Asia

(PH) Philippines Economic Chief Pernia: Risks to GDP include interest rates and disruptive capital flows

North America

US equity markets ended lower: Dow -0.6%, S&P500 -0.6%, Nasdaq -1.4%, Russell 2000 -0.6%
S&P500 Technology -1.6%
TSLA Panasonic confirms to raise production capacity at gigafactory – Japanese Press
LOGI Reports Q1 $0.34 v $0.24 y/y, Rev $608M v $530M y/y; To acquire California based Blue Microphones for ~$117M in cash
(US) Trump Attorney Giuliani: Trump interview with Special Investigator Mueller is ‘highly unlikely’, been driven further from taking questions from Mueller
(CA) Canada said to be rejected by US from the NAFA talks – National Post; C$ falls 0.25% against USD

Europe

(UK) Jul GfK Consumer Confidence: -10 v -9e
(IE) Ireland Central Bank: Trims 2018 GDP growth forecast from 4.8% to 4.7%; affirms 2019 GDP growth forecast at 4.2%
IGY.DE E.ON said to consider merger with the company – German Press

Levels as of 01:30ET

Hang Seng -0.6%; Shanghai Composite -0.2%; Kospi -0.1%; Nikkei225 -0.0%; ASX 200 +0.1%
Equity Futures: S&P500 +0.1%; Nasdaq100 +0.2%, Dax +0.1%; FTSE100 +0.0%
EUR 1.1700-1.1719; JPY 110.77-111.43; AUD 0.7404-0.7434;NZD 0.6813-0.6833
Aug Gold -0.1% at $1,220/oz; Sept Crude Oil -0.5% at $69.81/brl; Sept Copper +0.4% at $2.80/lb