Japanese equities decline amid focus on Golden Week
|Asia Market Update: Japanese equities decline amid focus on Golden Week; Asia generally ignores recent US/China trade headlines, US/Japan debate currencies
General Trend:
- Japanese financials decline amid recent earnings from Nomura
- Nintendo declines on Switch device guidance
- Japanese companies due to report earnings after the market close include Sony, Komatsu and Hitachi
- Consumer Discretionary and property shares are among the decliners in Shanghai; Air China drops following earnings
- Australia’s Flight Centre declines over 11% on profit warning
- Intel weighs on Asian chipmakers
- Intel declines over 7%, guided Q2 results below consensus
- Amazon trades flat in the afterhours following earnings/guidance
- PBoC skipped reverse repo for 5th consecutive session, continues to drain liquidity
- Japan’s March industrial production and unemployment rate disappoint
- Tokyo April Core CPI hits the highest level since 2015
- New Zealand reports record exports in March on dairy products and China
- Aussie Q1 export prices beat ests on iron ore
- Japan PM Abe expected to meet US President Trump on Friday, trade expected to be on the agenda
- Japan’s Golden Week holiday is approaching. Japan's exchanges are due to be closed between April 27 (Saturday) to May 6th (Monday)
Headlines/Economic Data
Australia/New Zealand
- ASX 200 opened -0.1%
- (AU) AUSTRALIA Q1 IMPORT PRICE INDEX Q/Q: -0.5% V 0.4%E; EXPORT PRICE INDEX Q/Q: 4.5% V 3.5%E
- (AU) AUSTRALIA Q1 PPI Q/Q: 0.4% V 0.5% PRIOR; Y/Y: 1.9% V 2.0% PRIOR
- (NZ) New Zealand Mar Trade Balance (NZ$): 922M v 131Me (highest since Apr 2011)
- (NZ) New Zealand Apr Consumer Confidence: 123.2 v 121.8 prior
China/Hong Kong
-Shanghai Composite opens -0.5%, Hang Seng -0.1%
- (US) Reportedly China offers 8 years of IP protections for biologics data (vs 12 years under current US law); US considers concession on drug protections – press
- (CN) CNBC's Javers: "President Trump just told a group of kids: 'We will soon be having President Xi from China coming' to the White House. BUT aides don’t have any information to back that up - telling me 'We don’t have anything to announce.'"
- (CN) China President Xi: Reiterates won't pursue yuan depreciation that harms others
- (CN) China PBoC Open Market Operation (OMO): Skips reverse repo operations for 5th consecutive session: Net: CNY20B drain v CNY80B drain prior
- (CN) China PBoC sets yuan reference rate: 6.7307 v 6.7307 prior
- (CN) Banks in Hangzhou City said to lower home mortgage interest rates - financial press
Japan
- Nikkei 225 opened -0.6%
- (JP) Japan Fin Min Aso: not in favor of linking currency talks with trade talks, we did talk about currency for ~5 minutes; confirmed that we will discuss currency; Yen movement has not impacted trade - comments after talking with Mnuchin
- (JP) Japan Trade Min Motegi: Confirms meetings with USTR Lighheizer; believes it is difficult to come to result this week; No talk of export volume restriction from US on autos
- (JP) BOJ Senior Official: Monetary easing aimed at achieving price target, not at FOREX; natural for monetary policy to vary from country to country
- (JP) Japan Mar Preliminary Industrial Production M/M: -0.9% v 0.0%e; Y/Y: -4.6% v -3.8%e
- (JP) JAPAN MAR JOBLESS RATE 2.5% V 2.4%E
- (JP) Japan Mar Preliminary Retail Sales M/M: 0.2% v 0.0%e; Y/Y: +1.0% v 0.8%e
- (JP) Japan Apr Tokyo CPI Y/Y: 1.4% v 1.1%e; CPI Ex-Fresh Food Y/Y: 1.3% v 1.1%e (highest since 2015)
Korea
- Kospi opened -0.6%
- (KR) Bank of Korea Gov Lee: Does not expect negative growth will continue, domestic economy in difficult situation
- (KR) South Korea Apr Consumer Confidence 101.6 v 99.8 prior (highest reading since Sept 2018)
North America
- (US) White House reportedly pushing for quick action to raise debt ceiling - Wash Post
- (US) White House Econ Adviser Kudlow: Sees Fed moving towards a rate cut - Interview
Levels as of 1:20 ET
- Nikkei 225, -0.4%, ASX 200 flat, Hang Seng +0.2%; Shanghai Composite -0.2%; Kospi -0.6%
- Equity Futures: S&P500 -0.1%; Nasdaq100 flat, Dax flat; FTSE100 +0.1%
- EUR 1.1142-1.1124 ; JPY 111.78-111.44 ; AUD 0.7032-0.7002 ;NZD 0.6646-0.6615
- Gold +0.2% at $1,281/oz; Crude Oil -0.6% at $64.83/brl; Copper +0.5% at $2.875/lb
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