Asia Market Update: Asian equities (ex-CN/HK/TW) follow US stocks up and Gold hits another record high amid softer USD; BOJ downgrades regional economies; Taiwan quake damage still being assessed amid TW/CN/HK holiday; US initial jobless tonight.

General trend

- With China, HK and Taiwan closed for holidays today, Japan’s Nikkei rose as high as 2% to be back above 40K with chip-related Tokyo Electron +2.7% in early trading despite overnight reporting ‘some’ damage to buildings in Taiwan post-earthquake.

- Amid a market holiday in Taiwan, some analysts are anticipating ‘only’ a $62M hit to Taiwan Semi bottom line due to yesterday’s quake. The company itself reported 70% of tools had recovered within 10 hours of the quake.

- Other analysts noted that high-end chips need 24/7 seamless operations in vacuum state for several weeks. Operational halts in Taiwan could mean some high-end chips in production may be spoiled.

- New Zealand commodity prices fell for March, attributed to softer dairy prices and weak forestry demand out of China.

- Australia building approvals fell into negative territory, but Mar Final PMI Services outperformed prelim.

- US Treasury Sec Yellen on her current trip to China reiterated the importance of the US ‘not decoupling from China’.

- A strong earthquake hit the Tokyo / Fukushima region, but no significant damage of tsunami alerts were reported.

- During the afternoon in Tokyo the BOJ regional Economic Report downgraded the assessment for 7 of 9 regions. Nikkei fell back -0.8% to less than 40K again.

- US equity FUTs up 0.2% to 0.4% during Asian trading.

Looking ahead (Asian time zone)

- Thu Apr 4th (Thu night: US initial jobless).

- Fri Apr 5th AU Balance of Trade (Fri night: US Non-farm Payrolls & Unemployment).

Holidays in Asia this week

- Thu Apr 4th China, Hong Kong, Taiwan.

- Fri Apr 5th China, Taiwan.

Headlines/economic data

Australia/New Zealand

- ASX 200 opens +0.1% at 7,793.

- Australia Feb Building Approvals M/M: -1.9% v 3.0%e.

- Australia Mar Final PMI Services: 54.4 v 53.5 prelim (confirms 2nd month of expansion).

- Australia RBA releases consultation paper on Future System for Monetary Policy implementation in Australia.

- New Zealand Mar ANZ Commodity Price M/M: -1.3% v 3.5% prior.

- New Zealand Feb Building Permits M/M: +14.9% v -8.8% prior.

- New Zealand Mar CoreLogic House Prices Y/Y: +0.1% v -1.4% prior [overnight update].

China/Hong Kong

- Hang Seng closed for holiday.

- Shanghai Composite closed for holiday.

- US Treasury Sec Yellen: Important that US and China not decouple their economies.

- BYD (1211.HK) Plans to launch first electrified pickup truck for the global market in 2024 – Press.

- Hong Kong Feb Retail Sales Value Y/Y: 1.9% v 3.9%e; Retail Sales Volume Y/Y: +0.5% v -1.2% prior.

- China PBoC: Domestic economy faces insufficient demand; To create suitable financial environment for economic recovery [overnight update].

- Russia Foreign Min Lavrov said to visit China soon – press [overnight update].

- China customs has asked certain traders to limit deliveries of foreign corn; notes domestic oversupply – US financial press [overnight update].

- China prelim Mar retail passenger vehicle sales M/M: +54%; Y/Y: +7% y/y v -21% y/y prior – PCA [overnight update].

- Reportedly Chinese authorities pushed Syngenta to withdraw application for $9B IPO in Shanghai due to volatile market – press [overnight update].

Japan

- Nikkei 225 opens +1.2% at 39,928.

- Japanese authorities unlikely to intervene unless yen falls below 155 against USD - Ex top currency diplomat Watanabe.

- Bank of Japan (BOJ) quarterly Regional Economic Report (Sakura): Downgrades assessment for 7 of 9 regions.

- Former BOJ Gov candidate Watanabe: Japanese authorities unlikely to intervene unless yen falls 'sharply below' 155 against USD.

- Japan releases weekly flows data [period ended Mar 29th]: Foreign buying of Japan equities: -¥441.3B v -¥889.6B prior; Japan buying of foreign bonds: -¥1.7T v +¥764.6B prior.

- JAPAN SELLS ¥900B VS. ¥900B INDICATED IN 30-YEAR JGB BONDS; AVG YIELD: 1.8080% V 1.7700% PRIOR; BID-TO-COVER: 3.47X V 2.93X PRIOR.

- REPORTS OF EARTHQUAKE SHAKING BUILDINGS IN TOKYO AND NEAR FUKUSHIMA; USGS 6.1 magnitude 83km East of Minami-Aoma; No tsunami threats from the earthquake.

- BOJ likely to wait until Fall for next rate hike according to ex-Board member Sakurai - Japanese press.

- US and Japan reportedly expected to agree to strengthen defense industrial cooperation at Biden-Kishida summit on Apr 10th – Nikkei [overnight update].

- Japan PM Kishida: Aim to create environment for dialogue between firms and investors [overnight update].

- Bank of Japan (BOJ) Q4 output gap: +0.02% v -0.37% prior [first positive reading since 2020] [overnight update].

South Korea

- Kospi opens +1.2% at 2,739.

- Korea said to examine Chinese e-commerce sites' personal data use - Korean press.

Other Asia

- Taiwan Semi (TSM) Follow Up: Said >70% of chip-making tools had recovered within 10 hrs of the earthquake, recovery operations at Tainan plant [most advanced factory] had recovered 80% – Nikkei [update].

- Philippines Interagency: cuts 2024 GDP growth forecast to 6.0-7.0% (prior: 6.5-7.5%), cites recent developments in the global economy; worsens 2024 budget deficit forecast to 5.6% of GDP (prior: 5.1%).

- Vietnam Central Bank (SBV): Stands ready to intervene to stabilize exchange rates; FX reserves exceed $100B.

North America

- (US) SEC reportedly asking publicly traded tech companies about their relationships with distributors and other business partners outside the US in a push to root out possible corruption - press.

- (US) MBA Mortgage Applications w/e Mar 29th: -0.6% v -0.7% prior.

- (US) MAR ADP EMPLOYMENT CHANGE: +184K V +150KE (biggest since July 2023); Job-changers median change in annual pay 10% v 7.6% prior.

- (US) Fed’s Bostic (hawk, voter): Economy is maintaining strong momentum; Still thinking one rate cut this year likely not until Q4 - CNBC.

- (US) MAR FINAL S&P SERVICES PMI: 51.7 V 51.7E; New orders increased at softer pace than Feb; Input coast and output price inflation quickened.

- (US) MAR ISM SERVICES INDEX: 51.4 V 52.8E; Prices Paid: 53.4 v 58.4e (lowest since March of 2020).

- (US) DOE CRUDE: +3.2M V -1.5ME; GASOLINE: -4.3M V -1ME; DISTILLATE: -1.3M V -0.5ME.

- (US) Fed Chair Powell: Recent data does not change the overall picture; Risks continue to move into better balance.

Europe

- UK Treasury said to consider tax reforms to boost philanthropy - FT.

- (IE) Ireland Mar PMI Services: 56.6 v 54.4 prior (36th month of expansion).

- US and EU push to reach an accord on fostering critical mineral supply chains reportedly set to miss another target this week - press.

- OPEC+ JMMC technical panel said to recommend no changes in oil policy (as speculated) - press.

- EU Commission reportedly opens two in-depth investigations under the Foreign Subsidies Regulation in the solar photovoltaic sector.

- (RU) Russia Dep PM Novak: Situation on domestic fuel market is stable; There is enough fuel on domestic fuel market.

Levels as of 00:20 ET

- Nikkei 225, +1.0%, ASX 200 +0.5% , Hang Seng closed; Shanghai Composite closed ; Kospi -1.4%.

- Equity S&P500 Futures: +0.2%; Nasdaq100 +0.4%, Dax +0.1%; FTSE100 +0.2%.

- EUR 1.0833-1.0845 ; JPY 151.54-151.73 ; AUD 0.6561-0.6589 ;NZD 0.6004-0.6032.

- Gold +0.1% at $2,317/oz; Crude Oil +0.3% at $85.86/brl; Copper +0.4% at $4.2305/lb.

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