Asian Market Update: Asian Bourses Pare Gains while US Index Futures Suggest Profit-taking from Rip-Roaring Rally; Geithner Tempers Enthusiasm, Gets More Help; Japan Extends Ban on Naked Shorts; Trichet Remains Vocal about Additional Easing; JPY Reaches Fresh Multi-Month Lows in Crosses

- Asian equity markets saw traders treading more cautiously after extremes seen in the US hours, with regional bourses pulling back from intra-day highs and front-month S&Ps suggesting some profit-taking. Nikkei225 still saw a 1.4% gain but was well off its pre-break intra-session highs.
Likewise, the Kospi and S&P/ASX gave back their above-2% advance to trade below +1% late in the session. Front-month S&Ps briefly opened higher but shifted into a downward bias shortly, falling 0.5% in latter Asian hours.

- Secretary Geithner could soon see more help in the overextended Treasury Department as Pres.
Obama nominated Neal Wolin to fill the Deputy role in a move to seat missing senior department personnel. Provided he gets by the notoriously trying vetting scrutiny of the Senate, Wolin would bring 6 years of Treasury Department General Counsel experience to assist a team shaken by the legally questionable bonus-gate handling of AIG. In a CNBC interview following today's announcement of the lauded "legacy" asset initiative, Geithner tempered enthusiasm, suggesting that "one day does not make the plan" even as this measure reduces the risk of a deeper recession.
Moreover, Treasury Secretary said there is sufficient capital to commence the announced "public-private" process, but would ask for more funds from Congress if needed.

- In most notable Tokyo news, Finance Minister Yosano took additional measures to stem the recent bearish trends in the Nikkei, extending the ban on naked short selling until the end of July. Yosano also extended the US welcome into the Quantitative Easing club, stating that the government debt purchase plan is a "big step forward" to result in a globally-felt benefit. On banking liquidity, Yosano said he saw no reason to loan FX reserves to financial institutions, but would do so at the request of the BOJ. Separately, Bank of Japan announced that it has purchased ¥1.1B in bank-held equity shares. Releasing its minutes from February meeting, BOJ commented on persisting nervous state in financial markets and saw little reason to expect a recovery before the second half of the year "at earliest." In share specific developments, Japan Tobacco was lower as Japan government announced plans to ban smoking in public places. Steelmakers Nippon and JFE were boosted by negotiating a 57% coking price cut with BHP. Mazda rallied on rumors it would generate positive FCF in the next FY, while Nintendo was projected to set a record in reaching 50M consoles sold, beating PS2's 3-yr mark with a 28-month timeframe.

- Elsewhere in Asia, South Korean Economy Minister forecasted a record trade surplus for the month of March at $4.5B on weaker KRW and lower import oil prices. In February, South Korea's trade surplus was $2.9B. In continued stimulus response, Korea's government confirmed plans to expand its extra budget by KRW28.9T, estimating it would lift the 2009 GDP by 1.5%. In Australia, banking and commodity names had once again led the earlier charge, with NAB and ANZ trading up over 4% before profit-taking pushed the index lower. Crude oil rise helped Woodside Petroleum pick up as much as 4%, while gold producers Newcrest and Lihir were 2% lower as safehaven yellow metal briefly lost its luster. Rio Tinto's head of iron ore unit was also notably downbeat, stating that signs of recovery in demand are not yet clear even as China does show signs of having turned the corner. In reference to Chinalco, Rio's Walsh said the stake sale opens the company to the prospects of expansion, and that price negotiations will not change even with Chinalco on board.

- In currencies, Japanese Yen remained heavily sold, reaching 98.20 after ranging around 97.00 against USD early in the day. EUR/JPY, GBP/JPY, and AUD/JPY pushed higher to fresh multi-month crosses amid heavy USD short momentum. EUR/USD approached 1.3680, GBP/USD was contained below 1.47 ahead of critical UK inflation data, and AUD/USD moved toward 0.71. ECB's Trichet reiterated his increasingly more dovish view, stating that policy rate is not at its lowest level, even as ECB's commitment to long term price stability remained firm.

- Crude oil prices are lower in Asia, after rallying by more than by more than 3% during the NY floor session. The crude price gains during the US session came as US equities had their largest percentage gain since Oct on the details of the Treasury's toxic asset plan. During the NY session front month crude prices had their highest close in 2009 and closed above $50/bbl for the 3rd consecutive session. Spot Gold prices are marginally higher in Asia, after declining during the NY session as the Treasury's plan reduced concerns related to the US banking system, as evidenced by the 10%+ gains in the shares of US banks. In terms of investor demand, the SPDR Gold Trust's holdings of gold declined by 0.31 tons to 1,114.3 tons as of March 23. On 3/19, SPDR increased its holdings of bullion to a record 1,114.6 tons.