'Groundhog day' in Japan, JP fin min and BoJ once again in focus, like on Fri

General trend

- Japan Fin Min Kato: Reiterates concerned about recent FX moves.

- BOJ Gov Ueda expected to speak on Dec 25th [Wed].

- We did not see much news in the BOJ and RBA minutes.

- Terrible South Korea Consumer Confidence data seen [South Korea Dec Consumer Confidence: 88.4 v 100.7 prior (largest decline in 16 years); Reminder Dec 3rd: (KR) SOUTH KOREA PRESIDENT YOON DECLARED 'EMERGENCY MARTIAL LAW'" accusing opposition party of North Korea sympathies and paralyzing the govt with anti-state activities].

- M&A still a focal point.

- Honda rises >15% [To buy back up to 1.1B shares for ¥1.1T; Signs basic agreement to 'consider' integration with Nissan; Aim to set up holding company in Aug 2026]

- US Steel declined in afterhours trading [Reportedly CFIUS unable to reach consensus on US Steel and Nippon Steel – Wapo].

- Asian equity markets trade mixed, modest moves seen amid holiday-mode.

- Banks outperform in China.

- (CN) US Biden Admin launches Section 301 trade investigation into Chinese-made 'legacy' semiconductors, possibly leading to more tariffs – press [Reminder Dec 16th: Reportedly US Biden Admin investigating China's legacy chips].

- Various markets have early closes on Tues [including Australia and Hong Kong].

- Holiday closures on Wed include Australia, Hong Kong, India, Indonesia, Malaysia, New Zealand, Philippines, Singapore, South Korea, UK, US; Australia and NZ markets are also closed on Thurs.

- Reminder: China PBoC to conduct its 1-year Medium-Term Lending Facility (MLF) expected in coming sessions

- Could we eventually see negative short-term bond yields in China? [China MOF sells 1-year bonds: Yield: 0.6612% v 1.2898% prior [from Nov 20th]; Reminder Dec 20th: (CN) China 1-year bond yield moved below 1.00% level (lowest since May 2009)]

Headlines/economic data

Australia/New Zealand

-ASX 200 opens flat at 8,199.

-RESERVE BANK OF AUSTRALIA (RBA) DEC MINUTES: if the future flow of data continued to evolve in line with, or weaker than, their expectations, it would further increase their confidence that inflation was declining sustainably towards target; If that were to occur, members concluded that it would, in due course, be appropriate to begin relaxing the degree of monetary policy tightness.

- IMF: Australia risks skewed to the downside, including private demand; Remains on narrow path to soft landing.

China/Hong Kong

-Hang Seng opens +0.1% at 19,911.

-Shanghai Composite opens +0.1% at 3,353.

- China Finance Ministry (MOF): Holds national fiscal work conference in Beijing [timing uncertain]; to step up efforts to resolve risks in key areas; To improve tariff policies.

-China PBOC sets Yuan reference rate 7.1876 v 7.1870 prior.

-China PBOC Open Market Operation (OMO): Injects CNY64.1B in 7-day reverse repos; Net drains CNY291.3B v drains CNY643.4B prior.

-China reportedly vows to curb monopoly in transport market more strictly - press.

-China KFC raises product prices by 2% [first price hike in 2 years]; cites factors including cost increases.

- China 'abruptly' changes the Army General that oversees ‘political loyalty’, named a new political commissar [General Chen Hui] for its ground forces; cites Xinhua – US financial press.

Japan

- Nikkei 225 opens +0.1% at 39,210.

- Japan sells ¥400B v ¥400B indicated in 20-yr, 30-yr, and 40-yr JGB's in liquidity enhancement auction; bid-to-cover: 3.17x.

-Japan BOJ Oct Minutes (2 decisions ago): The Japanese economy is likely to keep growing at a pace above its potential growth rate, with overseas economies continuing to grow moderately and as a virtuous cycle from income to spending gradually intensified against the background of factors such as accommodative financial conditions.

- (US) Yen-hedged US bonds yields turn positive [first time since 2022]; notes drop in US dollar hedging costs; the yield for Yen-hedged 10-year US notes hit 0.28% – US financial press.

Korea

-Kospi opens +0.3% at 2,450.

-Poongsan Corp [103140.KR] Chairman said to have been invited to the inauguration of Trump - Press.

-South Korea opposition seeks to launch impeachment on PM Han - Yonhap.

-Reportedly South Korean Pres Yoon is unlikely to appear at probe questioning in Dec 25th - press.

- South Korea to hold judges meeting on Yoon impeachment on Dec 26th [Thurs.] - Yonhap.

-Bank of Korea (BOK) Financial Stability Report: Pace of household debt may increase with easing of policy rates.

-South Korea FX market to close on Dec 31st [Tues] and reopen at 10 AM [local time] on Jan 2nd [Thurs].

- Japan Chief Cabinet Sec Hayashi: Group from North Korea stole assets from DMM Bitcoin.

Other Asia

- (TH) Thailand Council of State: Government-backed candidate for Thailand Central Bank (BOT) Chairman position 'unqualified' [**Reminder Nov 12th: (TH) Thailand is expected to name critic Kittratt Na-Ranong as central bank chairman – Press].

North America

-Tesla [TSLA]: Makes additional price cut of CNY10.0K for the Model Y in China [implies price cut of ~4%] (**Reminder Nov 24th: Cut Model Y prices in China; announced a CNY10,000 ($1,381) discount on the Model Y real-wheel drive and long-range all-wheel drive variants.).

Europe

-(FR) Eric Lombard reportedly picked to lead France Finance Ministry - press.

Levels as of 00:20 ET

- Nikkei 225, -0.3%, ASX 200 +0.2% (early close) , Hang Seng +1.1% [early close]; Shanghai Composite +0.8% ; Kospi flat.

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

- EUR 1.0411-1.0388 ; JPY 157.39-156.93 ; AUD 0.6251-0.6224 ;NZD 0.5659-0.5634.

- Gold +0.2% at $2,632/oz; Crude Oil +0.5% at $69.54/brl; Copper -0.1% at $4.0918/lb.