Japan inflation hits 2-year lows

Asian Mid-session Update: Shanghai plummets again; Japan inflation hits 2-year lows

Economic Data

- (JP) JAPAN MAY JOBLESS RATE: 3.3% V 3.3%E; matches the lowest reading since Apr 1997

- (JP) JAPAN MAY NATIONAL CPI Y/Y: 0.5% (2-year low) V 0.4%E; CPI EX FRESH FOOD Y/Y: 0.1% (2-year low) V 0%E

- (JP) JAPAN JUN TOKYO CPI Y/Y: 0.3% (2-year low) V 0.5%E; CPI EX FRESH FOOD Y/Y: 0.1% (2-year low) V 0.1%E

- (JP) JAPAN MAY OVERALL HOUSEHOLD SPENDING Y/Y: 4.8% V 3.6%E; first rise in 14 months

- (NZ) NEW ZEALAND MAY TRADE BALANCE (NZD): +350M V -100ME; 5th straight surplus

Index Snapshot (as of 02:30 GMT)

- Nikkei225 -0.5%, S&P/ASX -1.5%, Kospi +0.3%, Shanghai Composite -3.6%, Hang Seng -1.2%, Sept S&P500 -0.2% at 2,090

Commodities/Fixed Income

- Aug gold +0.2% at $1,174/oz, Aug crude oil -0.1% at $59.66/brl, Jul copper +0.4% at $2.63/lb

- GLD: SPDR Gold Trust ETF daily holdings rise 6.8 tonnes to 713.2 tonnes; highest since June 1st

- SLV: iShares Silver Trust ETF daily holdings rise to 10,236 tonnes from 10,206 tonnes; highest since May 6

- (CN) China MOF sells CNY10.1B in 273-day bills v CNY15B indication, yield 2.209%

- (JP) BOJ offers to buy ¥375B in 1-3 yr JGBs, ¥400B in 3-5yr JGBs, ¥240B in 10-25yr JGBs and ¥140B in JGBs with maturity over 25-yr

- (US) Weekly Fed Balance Sheet Total Assets for week ending June 24th: $4.50T v $4.49T prior; M1 y/y change: 7.6% v 7.8% prior; M2 y/y change: 5.9% v 5.9% prior

Market Focal Points/FX

- Weakness of the second straight down day on Wall St has resonated in the far east, With Shanghai Composite hit particularly hard in another Friday rout. Recall last Friday marked the crescendo of a 13% weekly decline with a 6% slump, and today the index was down as much as 5% in the morning session, falling within 30pts away of a 1-month low below 4,300. Analysts continue to hold active IPO process partially responsible for the heavy selling, with 28 companies having been approved to IPO this week estimated to freeze up some CNY1.5T in investment funds.

- Greek headlines, which did not give way to optimism overnight, remained just as downbeat in Asia and heading into the weekend. German chancellor Merker comments from Brussels indicated she would not commit to expecting a positive outcome, only stating that time for Athens is running out. French Pres Hollande also added that Greece needs better proposals to facilitate the process, and EU Pres Tusk stated there is no need for another euro summit over the weekend, deferring to Eurogroup summit expected to conclude deliberations on Saturday.

- Economic data out of Japan were mixed, with 18-year low in unemployment and bigger than expected household spending increase offset by 2-year lows in CPI. Nikkei225 was down slightly, but JPY was stronger across the board, with USD/JPY falling 40pips below 123.30, EUR/JPY down 70pips below 138, AUD/JPY and NZD/JPY down about 50pips. Trading in the NZD was especially volatile. RBNZ released its statement of Intent for FY15-18 calling NZD levels as unsustainable and sending NZD/USD down 50pips below 0.6870. Later in the day, New Zealand trade came in as a 5th straight surplus vs expectations of a deficit, supported by strong recovery of export demand from the US.

Equities

US equities/ADRs:

- NKE: Reports Q4 $0.98 v $0.84e, R$7.78B v $7.68Be; Affirms FY16 growth rate expectations, constant-currency Rev growth seen in low double digits, GM to expand 50bps; Sees Q1 Rev growth in low single digits - conf call; +3.5% afterhours

- SNX: Reports Q2 $1.55 v $1.54e, R$3.25B v $3.41Be; -8.6% afterhours

- MU: Reports Q3 $0.54 v $0.57e, R$3.85B v $3.94Be; Guides Q4 Rev $3.45-3.70B v $4.19Be; -11.5% afterhours

Notable movers by sector:

- Consumer discretionary: Tsui Wah Holdings 1314.HK -2.3% (FY14/15 result); Pacific Textiles Holdings 1382.HK +6.1% (FY14/15 result); Luk Fook Holdings 590.HK -1.3% (FY14/15 result); SA SA International Holdings 178.HK -1.4% (FY14/15 result)

- Consumer staples: Woolworths Limited WOW.AU +4.5% (KKR said to consider bid)

- Financials: China Everbright Bank 601818.CN -1.3% (to raise leverage)

- Industrials: Bradken Ltd BKN.AU -12.8% (merger approach, FY15 guidance)

- Technology: Coolpad Group 2369.HK +2.4% (controlling holders to sell shares)

- Healthcare: Daiichi Sankyo Co Ltd 4568.JP +1.4% (EU approves drugs)