BOJ stands pat on policy and maintains economic assessment

Asian Mid-session Update: BOJ stands pat on policy and maintains economic assessment; Samsung Electronics rallies as profit growth recovers

Economic Data

- (CN) China Sept FX Reserves: $3.51T v $3.50Te, v $3.56T prior (5th consecutive month of decline)

- (JP) BANK OF JAPAN (BOJ) POLICY STATEMENT: MAINTAINS ITS MONETARY BASE EXPANSION AT ANNUAL PACE OF ¥80T (AS EXPECTED)

- (JP) JAPAN SEPT OFFICIAL RESERVE ASSETS: $1.25T V $1.24T PRIOR

- (AU) AUSTRALIA SEPT AIG PERFORMANCE OF CONSTRUCTION INDEX: 51.9 V 53.8 PRIOR (2nd month of expansion)

- (UK) SEPT BRC SHOP PRICE INDEX Y/Y: -1.9% V -1.4% PRIOR (29th month of decline)

Index Snapshot (as of 02:30 GMT)

- Nikkei225 -0.2%, S&P/ASX flat, Kospi +0.5%, Shanghai Composite closed, Hang Seng +1.0%, Dec S&P500 -0.2% at 1,964

Commodities/Fixed Income

- Dec gold +0.1% at $1,148/oz, Nov crude oil +1.2% at $49.11/brl, Dec copper +0.8% at $2.37/lb

- (US) API Petroleum Inventories: Crude: -1.2M v +4.6M prior week

- SLV: iShares Silver Trust ETF daily holdings fall to 9,855 tonnes from 9,903 tonnes (lowest level since Dec 2012)

- (AU) Australia MoF (AOFM) sells A$900M in 3.25% 2025 Bonds; avg yield: 2.62%; bid-to-cover: 2.14x

Market Focal Points/FX

- Asian indices are mixed, tracking less upbeat sentiment on Wall St where stocks broke a string of 5 consecutive sessions of gains. Instead, Asian bourses were more closely aligned with regional developments rather than broader market bias. In FX, USD remained under pressure, particularly against JPY and NZD, as USD/JPY fell some 50pip after BOJ stood pat on policy and NZD extended its gains to 6-week high near $0.66 on another strong dairy trade auction out of Fonterra. S&P eminis were up 4pts around 1,974 late in the Asian session.

- BOJ declined to offer any additional monetary policy easing and also maintained its economic assessment on broader economy and all of its components. Few were expecting expanded QE, however the no-change in all sectors does little to bolster the case for a more popular view of easing in late October, when the BOJ will also unveil its forecasts for inflation and growth. Earlier today, former MOF official Sakakibara (Mr. Yen) said expanded QE may actually arrive later in December.

- Korea's Kospi is bolstered by strong guidance out of Samsung Electronics, which topped consensus with prelim Q3 Op profit KRW7.3T (v KRW4.1T y/y) v KRW6.7Te, Rev KRW51.0T (v KRW47.5T y/y) v KRW50.6Te. This also marks the first quarter of rising profits in some 2 years. Samsung shares were up nearly 8% headed toward the close.

- China put out its FX reserves data showing the govt spent about $50B supporting the Yuan in Sept - about half the estimated amount but still a notable margin. Separately, report out of Moody's revised China GDP target for next year down to 6.3% from 6.5%. This also follows the WEO report out of the IMF earlier today which actually maintained China GDP at 6.8% in 2015 and 6.3% in 2016. Slowing GDP in China was also on display in the quarterly report out of Yum Brands, where the pace of recovery was well below the company's expectations.

- Down under, Australia put out its 2nd straight month of expansion in AiG construction, while iron ore miner Fortescue had reportely received further interest in its assets from China. New Zealand's global dairy trade auction earlier in US hours saw its 4th straight price gain, though industry watchers noted higher prices were in part due to the 2-month low in the quantity of dairy being offered.

Equities

US equities/ADRs:

- X: Announces possible consolidation of flat-rolled operations; 2K employees issued WARN notices; -1.2% afterhours

- NKTR: Closes direct private placement with TPG special situations partners of $250M; -1.2% afterhours

- ADBE: Guides initial FY16 $2.70 v $3.23e, R$5.7B v $5.97Be, provides long term guidance ahead of analyst day; -3.1% afterhours

- CLF: Terminates pellet supply agreement with Essar Algoma; -7.4% afterhours

- NUS: Guides Q3 R$570-573M v $629Me; cites currency headwinds and lower sales in China; -10.9% afterhours

- YUM: Reports Q3 $1.00 v $1.07e, R$3.43B v $3.68Be; Cuts FY15 EPS guidance; Raises dividend 12% to $0.46 from $0.41 (implied yield 2.2%); -18.3% afterhours

- ADXS: Reports clinical hold of investigational agent Axalimogene Filolisbac; -25.8% afterhours

Notable movers by sector:

- Consumer discretionary: Ryohin Keikaku 7453.JP -7.7% (H1 result); J.Front Retailing 3086.JP +1.1% (H1 result); Air New Zealand AIR.NZ +2.6% (H1 guidance)

- Financials: Daewoo Securities 006800.KR +1.7% (bid speculation)

- Industrials: Nippon Express 9062.JP -2.7% (H1 earning speculation); China Resource Cement 1313.HK -4.0% (profit warning); Aurizon Holdings AZJ.AU -0.4% (cost cuts)

- Technology: Sony Corp 6758.JP +0.8% (to start chip company); MediaTek 2454.TW +3.9% (Sept revenue); Samsung Electronics 005930.KR +6.3% (Q3 prelim result)

- Materials: Glencore Xstrata 805.HK +7.0% (financing arrangements); Saracen Mineral Holdings SAR.AU +1.3% (Q1 result)

- Energy: Santos STO.AU +10.5% (stake sell-off speculation); Woodside Petroleum WPL.AU +4.4%, Origin Energy ORG.AU +23.8% (oil price rises)

- Healthcare: Summerset Group SUM.NZ +2.8% (Q3 guidance)