BoJ rate decision inline, forward guidance was hawkish, MAS eases slightly

General trend

- BOJ: If the outlook presented in the January Outlook Report will be realized, the Bank will accordingly continue to raise the policy interest rate and adjust the degree of monetary accommodation.

- (US) Trump interview with FOX News starts airing; Says would rather NOT have to use tariffs over China - US financial press.

- CNH rallies on Trump comments on China [21:08].

- Nikkei initially extended rise post BOJ, the index later moved below 40K.

- Asian equity markets trade generally higher.

- BOJ Gov Ueda’s press conference is expected at 4:30 GMT.

-Reminder: China expanded market closures for Lunar New Year Holiday from 6 to 8 days, effective from Jan 28th 2025 - press.

Headlines/economic data

Australia/New Zealand

-ASX 200 opens +0.1% at 8,383.

-AUSTRALIA JAN PRELIMINARY MANUFACTURING PMI: 49.8 V 47.8 PRIOR (12th month of contraction); Services PMI: 50.4 v 50.8 prior (12 month of expansion).

China/Hong Kong

-Hang Seng opens +0.7% at 19,842.

-Shanghai Composite opens -0.2% at 3,222.

- CHINA PBOC CONDUCTS CNY200B 1-YEAR MEDIUM-TERM LENDING FACILITY (MLF); LEAVES RATES UNCHANGED AT 2.00%; Drains net of CNY795B in liquidity.

-HKMA lent HK$2.0B to banks through discount window on Thurs [Jan 23rd].

-China PBOC Open Market Operation (OMO): Injects CNY284B in 14-day reverse repos; Net injects CNY179B.

-China PBOC sets Yuan reference rate: 7.1705 v 7.1708 prior.

-China President Xi visited Bengang Steel Plates Co. in Liaoning on Thursday - Chinese media.

Japan

- Nikkei 225 opens +0.3% at 40,060.

-BANK OF JAPAN (BOJ) RAISES TARGET RATE BY 25BPS TO 0.50%; AS EXPECTED.

- JAPAN DEC NATIONAL CPI Y/Y: 3.6% V 3.4%E; CPI EX-FRESH FOOD (CORE) Y/Y: 3.0% V 3.0%E.

-Japan Fin Min Kato: Will work toward early passage of the initial budget; Reiterates expects BOJ to work closely with the government.

- JAPAN JAN PRELIMINARY PMI MANUFACTURING: 48.8 V 49.6 PRIOR [7th straight contraction and lowest since Mar 2024]; PMI Services: 52.7 v 50.9 prior (3rd month of expansion).

-Rengo [largest trade union in Japan] President: Very important to secure wage rises as real wages continue to decline; result of this year's Shunto wage talks must exceed last year's.

- On Thursday [Jan 23rd] afternoon in Japan, an ‘unusually large’ bid emerged in the [JGB] futures, the bid size was around 1,000 lots; cites a dealer at a firm in Japan – financial press [update].

-Mitsubishi Motor [7211.JP]: Said to be considering NOT joining the planned merger between Nissan and Honda - Yomiuri.

-Bridgestone [5108.JP]: Says to close tire plant in Tennessee, effective Jul 31st.

Korea

- Kospi opens +0.6% at 2,529.

- South Korea acting President Choi: Continue to closely monitor financial markets during the upcoming Chinese lunar holiday.

Other Asia

- SINGAPORE CENTRAL BANK (MAS) QUARTERLY MONETARY POLICY STATEMENT: EASING POLICY; WILL REDUCE SLIGHTLY THE SLOPE OF THE POLICY BAND WITH NO CHANGE TO THE WIDTH; MAINTAINS THE CENTER OF THE BAND [first easing of policy since 2020].

- India Jan Preliminary PMI Manufacturing: 58.0 v 56.4 prior (43rd month of expansion); PMI Services: 56.8 v 59.3 prior (42nd month of expansion).

North America

-(US) Trump interview with FOX News starts airing; Says would rather NOT have to use tariffs over China - US financial press.

- (US) Pres Trump: The US has the largest amount of oil and gas of any country and we're going to use it; Will ask Saudi and OPEC to lower oil prices - World Economic Forum.

-(US) President Trump said to consider Susan Coller Monarez as the acting CDC Dir - US media.

-(US) US Pres Trump: Signing action related to AI; Also signs an order to form internal working group on crypto.

-(US) INITIAL JOBLESS CLAIMS: 223K V 220KE; CONTINUING CLAIMS: 1.899M V 1.866ME.

-(US) TREASURY $20B 10-YEAR TIPS AUCTION DRAWS 2.243% V 1.883% PRIOR; BID TO COVER 2.48 V 2.38 PRIOR.

-OpenAI: Stargate AI Project to 'exclusively serve' OpenAI - FT.

-Tesla [TSLA]: Launches new Model Y Long Range in the US at $59.9K - US financial press.

Europe

-UK Jan GfK Consumer Confidence: -22 v -18e [lowest since Dec 2023].

Levels as of 00:20 ET

- Nikkei 225, +0.1%, ASX 200 +0.4% , Hang Seng +2.1%; Shanghai Composite +0.9% ; Kospi +0.6%.

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

- EUR 1.0454-1.0411 ; JPY 156.41-155.00 ; AUD 0.6324-0.6278 ;NZD 0.5794-0.5671.

- Gold +0.6% at $2,780/oz; Crude Oil flat at $74.60/brl; Copper +1.1% at $4.3758/lb.