Asian Market Update: Equities Shrug Poor US Jobs and North Korea Missile Launch with More Gains; Consensus Estimates Reassess RBA Decision to a Hold as Aussie Officials and Data Portend More Weakness; Japanese Yen, Gold Plummet to Multi-Month Lows

- Asian bourses have retained their upward bias, writing off another gloomy US jobs number on Friday as a "lagging indicator" while also ignoring heightened geopolitical uncertainty of a North Korean rocket launch. Nikkei225 was once again at the forefront of the rally, with currency weakness helping Japanese exporters, trading as high as +2.7% ahead of the break before consolidating gains to +1.8% in latter part of the session. Korea's Kospi was also higher by nearly 2%, while Australia's S&P/ASX gains were weighed down by weakness in miners to just +0.5%. Front-month S&Ps implied yet another higher open on Wall Street with a 0.7% advance.

- Defying international opposition, North Korea carried out its planned Saturday missile launch with mixed reported success. Despite being treated as a mere blip in financial markets, the highly profiled launch did prompt an emergency meeting of the UN security council on Sunday, where disagreement over the response amounted to no concrete single-voice retort. Japan called for a new round of sanctions and US condemned the launch, while China urged a "cautious, proportionate" response and Russia - reportedly peeved by US announcement to proceed with Eastern Europe missile shield plan - advocated restraint in relations as a response. S&P weighed in on the development further, noting that the launch would not threaten South Korea's credit rating or outlook.

- In Tokyo, top three financial institutions responded in unison to last week's Nikkei press speculation that they might post a FY net loss, stating that yearly earnings were not yet determined. Despite the early gains however, Mitsubishi UFJ, Mizuho, and Sumitomo traded close to unchanged levels coming out of midday break. In other share-related news, Toshiba picked up 6% on general currency weakness driven sector strength as well as the announced partnership in LED business with Germany's BJB. Elpida was among the notable decliners on Nikkei press speculation of a wider than expected FY net loss on declining DRAM chip prices despite seeing shipments from company's factories up by as much as 90%. Elpida was among the Nikkei's largest gainers in the prior week on Taiwan partnership developments, potentially leading to today's profit taking. Japanese Finance Minister Yosano announced plans to unveil the new stimulus program requested by PM Aso at the start of last week on April 10th - a package rumored to exceed 2% of Japan's GDP. Earlier, Nikkei press speculated that Japanese government would look to extend the period of low rate loans to owners of "good quality" homes as part of this most recent plan.

- Mining names in Australia traded generally weaker, keeping S&P/ASX gains more subdued on a relative regional basis. Rio Tinto added to uncertainty over its controversial Chinalco deal, disclosing contingency plans of a £8B rights issue in the event of the deal falling through, while Fortescue Metals announced a hold on proposed expansions amid ongoing company cash squeeze and weak demand.
Shares of RIO and FMG were down 2.5% and 3.0% respectively. In turn, gold producers Newcrest and Lihir were notably lower as price of gold dipped below $880. Looking ahead, consensus estimates repriced tomorrow's RBA decision to a hold at 3.25% from last week's consensus view of a 50bp cut. However, Australia's Treasurer Swan hinted at easing by suggesting that he would generally like to see any official rate cuts, justified by deteriorating global economic conditions, passed on by banks.
Aussie economic data also left much to be desired, with March job advertisements remaining weak with an 8.5% monthly contraction following last month's record decline and TD securities inflation registering first m/m negative since December. Despite RBA cuts in recent months, Australian stock exchange report also suggested additional easing would be welcome, noting that March capital raisings remained subdued.

- In currencies, reemerging risk appetite translated into Japanese Yen selloff reaching a fever pitch, with USD/JPY retesting psychologically critical 100 level and leading to accelerated JPY losses to 100.80. EUR/JPY, GBP/JPY, and AUD/JPY were also at multi-month highs, reaching 137, 150.80, and 72.75 respectively. UK's Sterling withstood Chancellor Darling's recognition of underestimated economic weakness and fresh forecasts of British economy not returning to growth until at least the end of the year. GBP/USD approached February high just below 1.50 handle. Single currency was also modestly stronger, rising above 1.3550 despite ECB Tumpel-Gugerell's view of room for additional ECB easing. In Commodity FX, AUD was more subdued than NZD, falling back below 0.72 ahead of tomorrow's RBA decision. On a relative basis, AUD/NZD pointed in favor of the Kiwi as it fell within 20 pips of multi-week lows below 1.21.

- Spot Gold is lower by more than 1.5% and is declining for the 3rd consecutive session. The higher risk appetite and gains in equities have been weighing on gold prices during today's session.
Additionally, gold prices failed to receive any support from North Korea's missile launch as the action was already expected by the market. In terms of investment flows, after not raising its gold holdings during the prior week, on today's session the SPDR Gold Trust ETF disclosed that its holdings declined by 0.07 tons as of April 3 and this was the first decline since March 23. Technically, gold has moved below $883 for the first time since late Jan and the 100-day EMA for the first time since Jan 16th.
Additionally, gold is below last week's support level, which was seen around $890/oz. Crude oil prices are higher by more than 1.2% and are tracking the gains in US equities futures.