Asian Market Update: Asian Markets Track US Declines As Trump And China Announce Trade Actions: Over 4% Losses In Japan And Shanghai

Mar 23 18, 06:36 GMT

Headlines/Economic Data

General Trend:

Steelmakers and exporters in Japan decline, as the government continues to seek tariff exemptions
Samsung Electronics declines over 2%; issued cautious commentary on OLED and mobile businesses in China
Tencent declines over 4% amid share placement
Foreigners continued to sell Japanese equities, weekly data
10 year US and China bond yields decline in the face of equity weakness, trade concerns
Japan 10-year JGB yield moves to lowest since Nov 2017
At the shorter end, Australia 3-month bank bill rate fixed higher
Japan Feb CPI rises as expected to highest since March 2015; still shy of BoJ price target
China traded metals move generally lower
USD/JPY hits 16-month low below ¥105
Japan Chief Cabinet Sec Suga thinks US trade measures are likely impacting forex

Australia/New Zealand:

China/Hong Kong

Shanghai Composite opened -2.8%, Hang Seng opened -3.7%
Hang Seng Info Tech Index -4.3%, Materials -3.6%, Industrial Goods -3.6%, Consumer Goods -3.4%, Energy -3.4%, Property/Construction -3.1%
Shanghai Composite Property Sub-index declines over 3%
(CN) China Commerce Ministry (MOFCOM): Plans reciprocal tariffs on US steel and aluminum products; plans tariffs on $3B in US steel, aluminum, pork and wine imports; To take legal action at WTO
(CN) China Commerce Ministry (MOFCOM): China does not want a trade war but not afraid of one
(CN) Brokerage companies in China said to increase risk controls related to share pledges – China Securities Journal
(CN) China regulator said to place curb on negotiable certificate of deposit (NCD) investments by bond funds – US financial press
(CN) PBoC Open Market Operation (OMO): Skips OMO v CNY10B injected in 7-day reverse repos prior; Net: CNY90B drain v CNY150B drain prior
(CN) China PBoC sets yuan reference rate at 6.3272 v 6.3167 prior

Japan

Nikkei 225 opened -1.9%; closed -4.5%
TOPIX Electric Appliances Index -4.2%, Iron & Steel -3.8%
Fast Retailing [9983.JP] declines over 5% (has exposure to US and China): expected to report March SSS on April 3rd
(JP) JAPAN FEB NATIONAL CPI Y/Y: 1.5% V 1.5%E; EX-FRESH FOOD (CORE) Y/Y: 1.0% V 1.0%E (both figures are highest since March 2015
(JP) Japan Fin Min Aso: US trade move does not warrant ‘surge in yen (JPY)’
(JP) BoJ New Executive Dir Maeda: Not at point where can consider policy exit as BOJ remains distant from price target
(JP) BoJ Dep Gov Wakatabe: BoJ policy is in the right direction, producing results
(JP) Exporters in Japan may lose ¥500B if USD/JPY stays at ¥106 – Nikkei

Korea

Other Asia

(ID) Indonesia 10-year government bond yield rises over 5bps; Indonesia Finance Ministry official cites trade war concerns
(SG) Singapore Feb CPI M/M: 0.5% v 0.5%e; Y/Y: 0.5% v 0.4%e

North America

US equities ended broadly lower: Dow -2.9%, S&P500 -2.5%, Nasdaq -2.4%, Russell 2000 -2.2%
S&P500 Financials -3.7%, Industrials -3.3%; Utilities +0.4%
Micron [MU] declines over 3% in the afterhours amid Q2 results and guidance
Nike [NKE] rose over 6% in the afterhours after reporting Q3 results and guidance
(US) Pres Trump announces $50B in tariffs over China intellectual property trade violations (as expected); Tariffs specifics to be published by USTR within 15 days; industry to get 30 day comment period; Identified 1,300 product categories that might be covered by the new tariffs – press
(US) Trade Rep Lighthizer: EU, Argentina, Australia, Brazil, South Korea will be exempt from trade tariffs; We have told Japan that we want a free trade agreement – Congressional testimony
(US) John Dowd resigns as Trump’s lead attorney as part of Mueller probe – NYT
(US) Trump Administration National Security Adviser McMaster to resign; to be replaced by Bush Admin official John Bolton
(US) House passes $1.3T omnibus spending bill (as expected)
(US) Senate advances $1.3T spending bill; final vote 65 to 32

Europe

(EU) ECB Draghi said to provide European leaders with upbeat view on economy at EU summit – press
(EU) S&P affirms ECB rating at AAA; outlook stable
(EU) EU Summit said to end without conclusion of US tariffs
(DE) Germany Chancellor Merkel: economy is going well in all EU member states
(UK) UK PM May: To stay for second day of EU Summit in order to discuss trade
Saudi Oil Min Al-Falih: reiterates OPEC/non-OPEC partnership will be maintained into 2019

Levels as of 01:00ET

Hang Seng -3.1%; Shanghai Composite -3.5%; Kospi -2.9%
Equity Futures: S&P500 -0.7%; Nasdaq100 -1.1%, Dax -0.8%; FTSE100 -0.3%
EUR 1.2299-1.2342 ; JPY 104.63-105.42; AUD 0.7686-0.7724 ;NZD 0.7202-0.7229
Feb Gold +0.8% at $1,338/oz; Feb Crude Oil +1% at $64.97/brl; Mar Copper -0.8% at $3.001/lb