USD/JPY extends rise
|Asia Market Update: Asia trades generally higher after gains on Wall St.; USD/JPY extends rise; CN trade balance is due on Thurs.
General trend
- USD trades generally firmer.
- Commodity currencies lag, AUD declines after prior gain.
- China Commerce Ministry official commented ahead of trade data.
- Taiwan Semi Chairman: Capex could hit $40B in 2023.
- China 7-day repo rate continues to rise.
- RBI announces more aggressive rate hike; Indian bond yields decline.
- Energy companies trade generally higher.
- Shanghai Composite lagged during morning trading [Property index drops >1.5%].
- Hang Seng outperforms; China regulator said to have approved 60 domestic games this month.
- Japanese automakers generally supported by the weaker Yen.
- Financials underperform in Australia following the recent RBA rate hike.
- US equity FUTs remain lower after prior rise.
- Thailand Central Bank expected to leave rates unchanged.
Headlines/Economic data
Australia/New Zealand
- ASX 200 opened flat.
- (AU) Australia PM Albanese said interest rate rise is a 'blow for families', to consider new policies to deal with inflation; the new budget is expected in Oct [comments follow larger than expected RBA rate hike] - press.
- (AU) Former Reserve Bank of Australia (RBA) Official MacFarlane: 50bps hike was the right call; Would be surprised if inflation returns to 2%, enough scarcity to keep CPI elevated.
- (NZ) New Zealand 10M Budget Deficit NZ$9.4B (vs forecast of -NZ$12.6B).
- (AU) Australia Treasurer Chalmers: Reserve Bank of Australia review is expected to begin within the next few months and last through mid 2023.
- (AU) Australia sells A$800M v A$800M indicated in 0.50% Sept 2026 bonds; Avg Yield: 3.2491%; bid-to-cover 3.28x.
- (AU) Australia PM Albanese said to be looking to Indonesia and India to expand trade outside of China (which it has been in a long standing dispute with) - SMH.
Japan
- Nikkei 225 opened +0.6%.
- USD/JPY Rises to ¥133.18 [highest since Apr 2002].
- (JP) Japan may expand employee pensions to smaller cos - Japanese press.
- (JP) Japan Q1 final GDP Q/Q: -0.1% V -0.3%E; GDP annualized Q/Q: -0.5% V -1.1%E.
- (JP) Japan June BoP Current Account: ¥501.1B v ¥524.5Be; Adjust Current Account: ¥511.5B v ¥399.2Be.
- (JP) Japan May Bank Lending Y/Y: 0.7% v 0.9% prior; Bank Lending (ex-trusts) Y/Y: 0.9% v 1.0% prior.
- (JP) Japan May Eco Watchers Current Survey: 54.0 v 52.0e; Outlook Survey: 52.5 v 51.5e.
- (JP) Bank of Japan (BOJ) announcement related to daily bond buying operation: Unchanged.
- (JP) Bank of Japan (BOJ) offers to buy 5-10 year JGBs at fixed rate of 25bps; Opens window to buy unlimited amount of 10-year JGBs at 0.25% [as expected].
Korea
- Kospi opened +0.3%.
- (KR) Bank of Korea sells KRW490B v KRW800B indicated in 1-year Monetary Stabilization Bonds (MSB): avg yield 2.300% v 2.100% prior.
- (KR) South KoreaQ1 preliminary GDP Q/Q: 0.6% V 0.7%E; Y/Y: 3.0% V 3.1%E.
China/Hong Kong
- Hang Seng opens %; Shanghai Composite flat.
- (CN) China Deputy Commerce Min (MOFCOM) Wang: Foreign Trade stabilization faces uncertainties; Sees global demand growth as low [comments ahead of May Trade Balance data that is due on Thurs (Jun 9th)].
- (CN) China PBOC Open Market Operation (OMO): Sells CNY10B in 7-day reverse repos v CNY10B prior; Net CNY0B v Net CNY0B prior.
- (CN) PBOC International Dept Offical Zhou: To keep guiding financing costs lower; Will keep CNY reasonably stable and strengthen currency flexibility.
- (CN) China Ministry of Finance (MOF) plans to sell CNY23.0B of yuan-denominated bonds in Hong Kong during 2022 - Chinese press.
- (CN) China PBOC sets Yuan reference rate: 6.6634 v 6.6649 prior.
- (CN) China State Grid to invest total CNY90B into urban power grid (follows report of total CNY500B into China power grid) - Press.
- (CN) Zhejiang said to have reduced restrictions on people incoming from regions with coroanvirus cases - Press.
- (CN) Shanghai Sec News: Monetary Policy in China has room to aid growth as borrowing demand recovers.
- (CN) Shanghai has started construction on 11 projects with a total investment value of CNY11.9B - Chinese press.
- (CN) China May debt inflows might total $2.0B, cites the IIF - US financial press.
Levels as of 01:20 ET
- Nikkei 225, +0.8%, ASX 200 +0.3% , Hang Seng +1.6%; Shanghai Composite -0.6%; Kospi +0.1%.
- Equity S&P500 Futures: -0.4%; Nasdaq100 -0.5%, Dax +0.3%; FTSE100 +0.3%.
- EUR 1.0709-1.0677 ; JPY 133.30-132.58 ; AUD 0.7237-0.7192 ;NZD 0.6494-0.6455.
- Gold -0.1% at $1,849/oz; Crude Oil +0.6% at $120.09/brl; Copper -0.7% at $4.4197/lb.
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