BoJ holds rates – GOOGL and MSFT boost equities

 Asia Market Update: BOJ holds rates; GOOGL & MSFT boost equities; JP Tokyo CPI disappoints; KR govt warns US EV subsidies could 'collapse'; Focus on US Mar PCE tonight.

General trend

- In a unanimous decision Japan’s BOJ decided to hold rates steady. In a very short statement the BOJ also said they will continue to purchase Japanese govt bonds, CP and corporate bonds in line with the prior BOJ MoPo meeting. Yen moved down another -0.3% to break 156.0 level for first time since 1990. JP 10-yr yields rose as high as 0.93% ahead of the decision but fell back to 0.91% post-decision.

- Google and Microsoft strong earnings A/H boosted a previously lackluster US equities session (weaker amid earlier released lower advance US Q1 GDP readings), with the NASDAQ touching back up at levels not seen in a week.

- Japan’s Tokyo CPI (which leads national figures with a high correlation) came in significantly lower than estimates, and with all 3 readings below the BOJ target of 2.0%. Yet in FX the Yen barely budged ahead of the BOJ rate decision due a few hours after the CPI release.

- South Korea govt warned that US Pres Biden's EV subsidy scheme is at risk of 'collapse' without an exemption regarding securing graphite from Chinese suppliers.

- Lithium price drop drove Australia export prices down, with Crude fertilisers and minerals -58.1%. Aussie Stats Agency added that Lithium declined in the quarter due to excess global supply and slower EV adoption.

- Hang Seng (+2.1%, with Mainland properties +6%) again outperformed Asian equities (all +1.0% or higher) with only ASX 200 under-performing (-1.5%).

- During Asian trading US equity FUTs held onto the higher levels achieved A/H on Google and Microsoft earnings.

Looking ahead (Asian time zone)

- Fri Apr 26th (Fri night US Mar PCE)

Holidays in Asia this week

- N/A

Headlines/economic data

Australia/New Zealand

- ASX 200 opens -0.6% at 7,636.

- Australia Q1 PPI Q/Q: 0.9% v 0.9% prior; Y/Y: 4.3% v 4.1% prior.

- Australia Q1 Export Price Index Q/Q: -2.1% v -0.6%e; Import Price Index Q/Q: -1.8% v 0.1%e.

- New Zealand Apr ANZ Consumer Confidence: 82.1 v 86.4 prior (11-month low).

China/Hong Kong

- Hang Seng opens +0.3% at 17,336; Shanghai Composite opens +0.1% at 3,054.

- China 10-year bond yield differential v UST at widest level since Jun 2002.

- China 1.99% government bond halted amid price rise, to resume trading at 2:35 GMT – US financial press.

- China Securities Daily: PBOC has little need to purchase govt bonds in near term, citing analysts.

- China Top Legislature passes tariff law on Apr 26th, effective Dec 1st.

- China prelim Apr retail passenger vehicle sales -1.5% y/y [overnight update].

- China Commerce Ministry (MOFCOM): New energy sector is facing global capacity shortage [overnight update].

- China said to have halted sale of derivatives linked to offshore LGFV debt - financial press [overnight update].

- Air France said to be in talks with China on major aircraft order ahead of Chinese President Xi's trip to France – press [overnight update].

- China PBOC sets Yuan reference rate: 7.1056 v 7.1058 prior.

- China PBOC Open Market Operation (OMO): Sells CNY2B in 7-day reverse repos; Net CNY0B v CNY0B prior.

Japan

- Nikkei 225 opens +0.3% at 37,725.

- BANK OF JAPAN (BOJ) LEAVES TARGET RANGE UNCHANGED BETWEEN 0.0-0.10%; AS EXPECTED.

- BOJ QUARTERLY OUTLOOK FOR ECONOMIC ACTIVITY AND PRICES.

- APAN APR TOKYO CPI Y/Y: 1.8% V 2.5%E; CPI (EX-FRESH FOOD) Y/Y: 1.6% V 2.2%E (All 3 readings below BOJ 2.0% target, first time since Sep 2022).

- Japan Fin Min Suzuki: Reiterates will deal with FX appropriately; continues to decline to comment on whether FX moves are excessive [follows BOJ decision].

- Japan Econ Min Shindo: Extremely important that the govt and BOJ closely communicate as macroeconomic policy enters a crucial phase exiting from deflation - Japanese press.

- Japan Fin Min Suzuki: FX trend may depend on "how long" the rate differentials persist - Japanese press.

- BOJ said to consider measures to reduce government bond purchases [BOJ meets on Thurs, with monetary policy announcement Friday] - Japanese press.

South Korea

- Kospi opens +0.9% at 2,711.

- South Korea Minister of Trade: Warns that US Pres Biden's EV subsidy scheme is at risk of 'collapse' - FT.

- Fitch: South Korea's public finances no longer a rating strength but now a neutral factor requiring near-term efforts to contain the rise in debt.

Other Asia

- Singapore Mar Industrial Production M/M: -16.0% v -8.8%e; Y/Y: -9.2% v -1.5%e.

- Singapore Q1 Final URA Private Home Prices Q/Q: 1.4% v 1.5% prior.

- Singapore Central Bank (MAS) Macroeconomic Review: Current monetary policy settings remain appropriate.

- Indonesia Fin Min: Sees Q1 GDP growth at 5.2% y/y.

North America

- GOOGL Reports Q1 $1.89 v $1.49e, Rev $67.6B v $66.0Be; Initiates first-ever $0.20/shr quarterly dividend; Additional up to $70B buyback (3.6% of market cap).

- MSFT Guides Q4 Rev $63.5-64.5B (calculated) v $64.5Be; Guides FY24 Op margins +2 ppt y/y (prior: Op margins+1-2ppt) - earnings call; Guides Q4 Capex to increase materially on a q/q basis.

- MSFT CEO: Seeing acceleration of large Azure deals - earnings call.

- INTC Exec: Expect Q1 to be the bottom and expect sequential revenue growth throughout the rest of the year into 2025 - earnings call comments.

- (US) Former Pres Trump allies reportedly draft up plans to 'blunt' the Fed's independence - WSJ.

- (US) INITIAL JOBLESS CLAIMS: 207K V 215KE; CONTINUING CLAIMS: 1.781M V 1.82ME.

- (US) Q1 ADVANCE GDP ANNUALIZED Q/Q: 1.6% V 2.5%E; PERSONAL CONSUMPTION: 2.5% V 3.0%E.

- (US) Q1 ADVANCE GDP PRICE INDEX Q/Q: 3.1% V 3.0%E; CORE PCE Q/Q: 3.7% V 3.4%E.

- (US) US Treasury Sec Yellen: Countries should only intervene in exchange rates on rare occasions.

- (US) MAR PENDING HOME SALES M/M: 3.4% V 0.4%E; Y/Y: -4.5% V -3.0%E.

- (US) WEEKLY EIA NATURAL GAS INVENTORIES: +92 BCF VS. +80 BCF TO +84 BCF INDICATED RANGE.

- (US) TREASURY $44B 7-YEAR NOTE AUCTION RESULTS: DRAWS 4.716% V 4.185% PRIOR, BID-TO-COVER RATIO: 2.48 V 2.61 PRIOR AND 2.56 OVER LAST 12 AUCTIONS.

Europe

- (IE) Ireland Apr Consumer Confidence: 67.8 v 69.5 prior (update).

- (UK) Apr GfK Consumer Confidence: -19 v -20e (two-year high).

- (TR) TURKEY CENTRAL BANK (CBRT) LEAVES ONE-WEEK REPO RATE UNCHANGED AT 50.00%; AS EXPECTED.

- AIR.FR Q1 €0.75 v €0.59 y/y, Rev €12.8B v €12.9Be; Affirms FY24 deliveries outlook.

- (EU) ECB's Panetta (Italy): Timely, small rate cuts would counter weaker demand and could be paused at no cost.

Levels as of 01:20 ET

- Nikkei 225 +1.1%; ASX 200 -1.4%; Hang Seng +2.1%; Shanghai Composite +0.9%; Kospi +1.4%.

- Equity S&P500 Futures +0.8%; Nasdaq100 +1.1%; Dax -0.4%; FTSE100 -0.2%.

- EUR 1.0718-1.0732; JPY 155.42-156.22; AUD 0.6517-0.6533; NZD 0.5940-0.5969.

- Gold +0.3% at $2,348/oz; Crude Oil +0.4% at $83.89/brl; Copper +0.7% at $4.5765/lb.