BoJ holds, waiting for Gov Ueda presser

Asia market update: BOJ holds, waiting for Gov Ueda presser; IDX stability concerns ahead of BI rate decision; Copper record $5 high; Focus on US FOMC Rate Decision.

General trend

- Bank of Japan held rates at 0.5%, as widely expected, with a unanimous 9-0 decision. Statement noted that growth seen above potential as virtuous income-to-spending cycle gradually intensifies. However, added trade policies of ‘other countries’ as an added risk going forward, highlighting uncertainties around Japan’s economy and prices remain high. JPY/USD vacillated in a narrow ~300 pip range between 149.20 and 149.55 after the decision. No forward guidance given. Markets waiting for BOJ Gov Ueda’s presser at 02:30ET (07:30am GMT) for clues of when the next hike may come. OIS chances of 25bp hike by July steady at 72.0% last night.

- Some of the language changes in the BOJ Statement: Rice prices; no forward guidance (unlike Jan); mentioned vigilance in statement; ‘due attention’; members had mentioned prior more FX impact vs past (but today added this language to the statement); ‘intensifying’. Also added “trade policies of overseas countries" to list of risks.

- Indonesia Central Bank (BI) rate decision due tonight, the day after a 6% free-fall in stocks forced a trading halt on the Indonesia bourse, causing widespread panic. Equity selling came amid the highest levels of Indonesian bond selling by global funds in 6 years and the Finance Minister Indrawati having to quell rumors she would be stepping down. (Indonesian stocks opened flat today, then drifted higher. A series of BI officials, financial regulators and lawmakers gave public comment today in an effort to calm markets, including an apparent climb-down from an emerging policy of placing top military personnel in charge of state-owned companies.

- Japan Feb trade balance came in lower than the surplus figures expected, with the first fall in imports since Nov 2024. Exports were up on stockpiling and tariff concerns.

- SK Hynix rose as much as +2.6% as it announced it had shipped the world's first 12-layer HBM4 samples to customers, well within Nvida’s Nov 2024 request for a 6-month delivery timeline due to “Nvidia not being able to supply enough GPUs to meet demand”. Prices later came back to 0.5% up.

- Samsung Electronics +2.2% as the company at its AGM indicated it will be looking out for M&A opportunities and will focus on HBM chips and expand its SSD lineup.

- Copper FUTs traded above $5 per pound for the first time ever.

- US equity FUTs +0.1% to +0.2% during Asian trading.

Looking ahead (Asian time zone)

- Wed Mar 19th (Wed night US FOMC Rate Decision).

- Thu Mar 20th NZ Q4 GDP, AU Feb Jobs, CN LPR, (Thu eve UK BOE Rate Decision, Thu night US Feb Home Sales).

- Fri Mar 21st JP Feb CPI, TW CBC Rate Decision.

Holidays in Asia this week

- Thu Mar 20th Japan.

Headlines/economic data

Australia/New Zealand

- ASX 200 opens -0.2% at 7,842.

- Australia Feb Westpac Leading Index M/M: 0.07% v 0.10% prior.

- Australia sells A$800M vs. A$800M indicated in 4.25% Dec 2035 bonds; Avg Yield: 4.4535% v 4.5983% prior; bid-to-cover: 3.53x v 3.00x prior.

- New Zealand Q4 Current Account (NZD): -7.0B v -6.7Be.

- New Zealand Q1 Westpac Consumer Confidence: 89.2 v 97.5 prior (update).

- New Zealand PM Luxon: Look forward to signing trade pact with India in 60 days - comments during India visit [overnight update].

China/Hong Kong

- Hang Seng opens -0.2% at 24,697; Shanghai Composite opens -0.2% at 3,424.

- Follow Up: SAFE [China FX regulator] unit is hiring in Hong Kong to manage 1/3 of China's $3.23T in FX reserves - SCMP.

- (US) WTO: US mission tells China and Canada it's 'ready to confer' after those countries brought formal trade disputes against the US - press.

- Pres Xi said to be angered that CK Hutchison didn't consult with CCP leadership before striking deal to sell Panama Canal assets – WSJ.

- BYD: China Commerce Ministry (MOFCOM) said to delay approving planned Mexico plant amid concerns Mexico would obtain unrestricted access to BYD technology - FT.

- (US) US Treasury Sec Bessent: All options are available on China investments; Reciprocal tariffs will Not be automatic 25% plus 25%; Pres Trump asked me to rethink the US sanctions regime; Past regime was undermining the US$'s reserve status - Fox Business interview.

- China Foreign Min Wang: China trade policies with EU are stable; Welcome Airbus to enhance investment in China [overnight update]

- China set to tighten export curbs on battery, chip material tech as public comment period in Feb (in-line with Dec 2024's announcement); The new curbs will apply to production technology for gallium, an element used to make semiconductors, and cathode materials for lithium-ion batteries – Nikkei [overnight update].

- China PBOC sets Yuan reference rate: 7.1697 v 7.1733 prior.

- China PBOC Open Market Operation (OMO): Injects CNY296B in 7-day reverse repos; Net injects CNY121B v injects CNY236B prior.

Japan

- Nikkei 225 opens +0.1% at 37,888.

- Bank of Japan (BoJ) leaves target rate unchanged at 0.50%; as expected; Decision to hold was unanimous 9-0.

- Japan Feb trade balance: ¥584.5B V ¥688.3BE; Adj Trade Balance: ¥182.3B v ¥491.5Be; (First fall in imports since Nov 2024).

- Japan Jan Final Industrial Production M/M: -1.1% v -1.1% prelim; Y/Y: 2.2% v 2.6% prelim.

- Japan Jan Core Machine Orders M/M: -3.5% v -0.1%e; Y/Y: 4.4% v 6.6%e.

- Japan Automobile Manufacturers Association Chairman: "Significant production adjustments to be expected" [in response to question on potential policy response if US tariffs from April 2nd cannot be avoided] - financial press.

Korea

- Kospi opens flat at 2,613.

- South Korea Acting President Choi: Will create US-based team to respond to US tariff policies; To pursue extra steps if housing market still unstable - financial press

- SK Hynix ships world's first 12-layer HBM4 samples to customers – statement.

- South Korea: Re-designates Gangnam as home transaction permit zone; to strengthen mortgage loan monitoring; real estate PF market is moving toward' soft landing'.

- Bank of Korea (BOK) Feb Minutes; Economic growth expected to be below forecast [overnight update].

Other Asia

- Monetary Authority Singapore (MAS) Survey of Professional Forecasters; - Cuts 2025 Headline CPI forecast from 1.9% to 1.7%.

- Indonesia lawmaker Djiwandono: No active military personnel to be placed in state companies located in Indonesia - financial press.

- Indonesia financial regulator: Risk factors from global markets affecting Indonesian stocks - financial press.

- Indonesia Central Bank (BI): Has conducted "bold and measured intervention" in FX markets [no mention of bond markets] - financial press.

- Thailand Central Bank (BOT) MPC Minutes: Economic recovery became more uneven.

- Philippines Fin Min Recto: Confident we will hit 6% growth this year.

North America

- (US) Pres Trump's Special Envoy Witkoff: Have had two compelling meetings with Russia's Pres Putin - Fox News interview.

- (UR) Follow up: Pres Trump: We want to get the war over; Cease-fire would have been tough, Russia has the advantage [comments post-call with Pres Putin of Russia]- financial press.

- (US) Trump has reportedly dismissed both Democratic commissioners at the FTC – press.

- (US) US Treasury Sec Bessent: All options are available on China investments; Reciprocal tariffs will Not be automatic 25% plus 25%; Pres Trump asked me to rethink the US sanctions regime; Past regime was undermining the US$'s reserve status - Fox Business interview.

- (US) Feb housing starts: 1.501M V 1.385ME; building permits: 1.456M V 1.453ME.

- (CA) Canada Feb CPI M/M: 1.1% V 0.6%E; Y/Y: 2.6% V 2.2%E; CPI Core-Median Y/Y: 2.9% v 2.7%e.

- (US) Feb import price index M/M: 0.4% V 0.0%E; Y/Y: 2.0% V 1.6%E.

- (US) Mar New York Fed Services Business Activity: -19.3 v -10.5 prior.

- (US) Weekly Redbook LFL Sales w/e Mar 15th +5.2% y/y; Mar MTD: +5.5% y/y.

- (US) US Feb industrial production M/M: 0.7% V 0.2%E; capacity utilization: 78.2% V 77.8%E.

Europe

- Ireland Central Bank Quarterly Bulletin: Warns of 'significant' impact from higher tariffs, cannot rule out recession - financial press.

- (UK) Times shadow MPC votes to leave interest rates unchanged - financial press (update).

- (DE) Germany Mar Zew current situation survey: -87.6 V -80.5E; expectation survey: 51.6 V 48.3E (highest since Feb 2022).

- (EU) Euro Zone Jan Trade Balance: €14.0B v €13.8Be.

- (IL) Israel Feb Unemployment Rate: 2.7% v 2.6% prior.

- (RU) Pres Putin: Sanctions against Russia are mechanism of systematic pressure on Russia.

- (IT) Italy PM Meloni: Not clear it is a good idea to respond to US tariffs with EU ones; We must work pragmatically to find common ground on tariffs.

- (EU) Commission Pres Von der Leyen: EU must invest in air defense systems, drones, artillery and missiles;New program to be called European Military Sales Mechanism.

- (DE) German Bundestag (lower house) approves debt brake reform for €500b defense and infrastructure fund; 513 votes in favor of passage.

Levels as of 00:20 ET

- Nikkei 225 flat, ASX 200 -0.4%, Hang Seng +0.3%; Shanghai Composite +0.1%; Kospi +1.1%.

- Equity S&P500 Futures +0.1%; Nasdaq100 +0.2%; Dax +0.1%; FTSE100 +0.2%.

- EUR 1.0928-1.0947; JPY 149.19-149.64; AUD 0.6355-0.6367; NZD 0.5809-0.5821.

- Gold +0.2% at $3,045/oz; Crude Oil -0.3% at $66.51/brl; Copper +0.5% at $5.0275/lb.