Weak JP H/H spending, more BoJ hike speculation, CN AI-chipmaker IPO opens 5x higher

General trend and developments

- Unexpectedly weak Japan October Household spending with a negative print where a positive read was expected. Not much reaction in FX markets with USD/JPY holding onto the 155 handle and JP bond yields a touch softer. OIS chances of a hike in Dec marginally higher to nearly 80% with January up to 91.5%.

- Front end of the Japanese yield curve again moved higher today with the long-end moving down in a further flattening of the curve since Monday’s significant steepening following Ueda's comments.

- Fresh press speculation today that the BOJ may not only hike on Dec 19th, but might be open to further hikes next year. USD began to unwind its overnight recovery after yesterday saw a higher JPY/USD (up to 154.43 late in the Asia session) following initial reports that the BOJ likely to indeed raise rates in December, with the Japan govt reportedly unlikely to block a hike. Still further reports said that BOJ may be carrying out assessments of the neutral interest rate level.

- China AI-chipmaker Moore Threads Technology opened 5x higher at CNY650/shr, far above the IPO price of CNY114.28/shr (follows $1.1B IPO).

- Meanwhile as the Trump Admin reportedly preparing to let Nvdia’s H200 chips be sold to China, US Senators said to plan bipartisan effort to block advanced chip sales to China.

- Nikkei shed 1.3% as Korea's Kospi outperformed +1.2% with Hyudai Motors +7% to a record high on continued strength following the finalization of the US-Korea trade deal down to a reduced 15% tariff including autos.

- China’s offshore Yuan continued to weaken after yesterday’s apparent PBOC policy tweak to monetary policy from ‘moderately loose’ to ‘prudent’. Reports overnight that China state-owned banks are buying dollars at the fastest pace in 14 months to halt Yuan strength as it marched steadily higher recent months to re-test the 7.00 handle vs USD.

- Further signs of Singapore wealth funds reassessing their China risks amid a parallel trend of international interest in Japanese stocks, Temasek-backed Fullterton said to be winding down its China hedge fund business while GIC disclosed a >5% stake in Japan electronics and IC packaging company Ibiden.

- China sold 30-year ultra-long bonds today at 2.302% (highest since Oct 2024).

- Softbank’s Masayoshi Son reportedly working out details of a plan that could see him raising hundreds of billions of dollars to build Trump-branded industrial parks around the US. Comes as Son raised his own stake in Softbank from 33.7% to 34.7%.

- US equity FUTs +0.2% to +0.3% during Asian trading.

*** JP Looking ahead (Asian-weighted releases, using Asian time zone)***

- Fri Dec 5th Oct Household Spending, (Fri night US Sept Core PCE, Michigan Dec prelim Consumer Sentiment.

Holidays in Asia this week

- Fri Dec 5th Thailand.

Headlines/economic data

Australia/New Zealand

- ASX 200 opens -0.1% at 8,607.

- APRA proposes a 3rd tier to banking prudential framework for banks with assets over A$300B; APRA expects to finalise the proposals in 2026 following three months of consultations.

- Australia sells A$1.0B vs. A$1.0B indicated in 2.75% Nov 2028 bonds; Avg Yield: 4.0252% v 3.3840% prior; bid-to-cover: 3.32x v 4.12x prior.

- New Zealand MBIE: Opens probe on NZ Financial Markets Authority (FMA) Chairman Craig Stobo; Stobo has temporarily stood aside.

China/Hong Kong

- Hang Seng opens -0.4% at 25,833; Shanghai Composite opens -0.1% at 3,873.

- Singapore wealth-fund Temasek-backed Fullterton said to wind down China hedge fund business - financial press.

- China AI-chipmaker Moore Threads Technology [688795.CN] opens at CNY650/shr, well above IPO price CNY114.28/shr (follows $1.1B IPO)

- USTR Greer: China is 'a challenge'.

- US Senators said to plan bipartisan effort to block advanced chip sales to China; Act would seek 30-month delay in export licenses; Would prevent sale of H200 and Blackwell chips – FT.

- China MOF sells 1-year and 30-year ultra-long bonds.

- China property investment expected to fall -15% in 22025 y/y (vs prior -11% forecast) - financial press poll.

- Reportedly China is deploying a large number of naval and coast guard vessels across East Asian waters, at one point more than 100, in the largest maritime show of force to date – press [overnight update].

- China reportedly implements new standards for food delivery platforms.

- China state-owned banks seen buying US dollars and tweak their trading style to blunt Chinese yuan (CNY) gains – press [overnight update].

- China Commerce Ministry (MOFCOM): EU made right choice in ending WTO case [overnight update]

- China PBOC sets Yuan reference rate: 7.0749 v 7.0733 prior.

- China PBOC Open Market Operation (OMO): Injects CNY140B in 7-day Reverse Repos; Net drains CNY162B v drains CNY176B prior.

Japan

- Nikkei 225 opens -1.0% at 50,530.

- Japan Oct Household Spending Y/Y: -3.0% v 1.0%e.

- Japan Oct Preliminary Leading Index CI: 110.0 v 109.3e.

- Japan sells ¥4.3T vs. ¥4.3T in 3-Month Bills; Avg Yield: 0.6260% v 0.5187% prior; Bid-to-cover: 3.80x v 2.61x prior.

- Japan 2-year JGB yield rises 1bp to 1.03%, highest since Aug 2007.

- Softbank: CEO Son said to be working with Trump Admin on high-tech factories plan - WSJ.

- Japan Fin Min Katayama: Will make sure market trust is not lost; have been having positive dialogue with BOJ Gov Ueda.- Nikkei.

- Japan Trade Min Akazawa: Monitoring US tariff lawsuit developments; confirms Japan cos. have filed lawsuits in the US seeking refunds of additional tariffs.

- Reportedly Japan's Govt considers income tax raises for defense, beginning in 2027 - press.

- Japan End-Nov Foreign Reserves: $1.36T v $1.35T prior.

- Japan Nov 1-20 Exports Y/Y: 5.7% v +0.3% prior; Imports +3.5% v -1.6% prior (provisional) - update.

- JPX CEO: Japanese yen levels are too weak – press [overnight update].

- BOJ is reportedly carrying out assessment of neutral interest rate level – Jiji [overnight update].

Korea

- Kospi opens -0.1% at 4,023.

- South Korea Oct Current Account Balance: $6.8B v $13.5B prior.

- Trump administration said planning to present South Korea and Israel as model allies in upcoming national defense strategy – Nikkei.

- South Korea Fin Min said long-term competitiveness is 'key' to stabilizing the KRW - Yonhap.

- Japan PM Takaichi said to be planning to meet South Korea Pres Lee in Jan - financial press [overnight update].

Other Asia

- Taiwan lawmakers again pass Fiscal Act revision, defying Taiwan cabinet request for a review of the revision - financial press.

- Philippines Nov CPI M/M: 0.2% v 0.3%e; Y/Y: 1.5% v 1.7%e (Annual pace has been below target range for the past eight months).

- Taiwan and Japan sign digital trade agreement – press [overnight update].

North America

- US Homeland Security Sec Noem: To expand countries on US travel ban list to 'over 30' - Fox News interview.

- US Trade Rep (USTR) Greer: Trump could decide next year to withdraw from the USMCA.

- Amazon reportedly mulls ending its long-standing partnership with US Postal Office (USPS); Amazon building its own delivery network - WaPo.

- (BR) BRAZIL Q3 GDP Q/Q: 0.1% V 0.2%E; Y/Y: 1.8% V 1.7%E.

- (US) Nov Challenger Job Cuts: +71.3K v +153.1K prior; Y/Y: 23.5% v 175.3% prior.

- (US) INITIAL JOBLESS CLAIMS: 191K V 220KE; CONTINUING CLAIMS: 1.939M V 1.963ME.

- (US) WEEKLY EIA NATURAL GAS INVENTORIES: -12 BCF VS. -14 BCF TO -18 BCF INDICATED RANGE.

- (US) Pres Trump will discuss trade with Mexico and Canada at Fri meeting (at FIFA WC draw, Dec 4th in Washington, DC) - press.

- (BR) Brazil Fin Min Haddad: Believe US tariff issue will be resolved.

- (US) White House plans to take more stakes in critical minerals companies - press cites National Energy Dominance Council Dir Agen speaking at conference.

- (US) Pres Trump will discuss trade with Mexico and Canada at Fri meeting (at FIFA WC draw, Dec 4th in Washington, DC) - press.

Europe

- (IE) Ireland Q3 Final GDP Q/Q: -0.3% v -0.1% prelim; Y/Y: 10.8% v 10.5% prelim.

- (PL) Poland Central Bank (NBP) Gov Glapinski: To maintain cautious monetary policy approach; Large budget gap limits scope for Polish rate cuts; No target level for rates - post rate decision press conference.

Levels as of 01:20 ET

- Nikkei 225 -1.3%; ASX 200 +0.2%; Hang Seng flat; Shanghai Composite +0.1%; Kospi +1.3%.

- Equity S&P500 Futures +0.2%; Nasdaq100 +0.4%; DAX +0.1%; FTSE100 +0.2%.

- EUR 1.1641-1.116.56; JPY 154.72-155.22; AUD 0.6606-0.6622; NZD 0.5761-57771- Gold +0.1% at $4,247/oz; BTC -1.1% at $91,992; Crude Oil -0.3% at $59.51/bbl; Copper +1.1% at $5.4195/lb.