Japanese equities decline amid focus on Golden Week

Asia Market Update: Japanese equities decline amid focus on Golden Week; Asia generally ignores recent US/China trade headlines, US/Japan debate currencies

General Trend:

- Japanese financials decline amid recent earnings from Nomura

- Nintendo declines on Switch device guidance

- Japanese companies due to report earnings after the market close include Sony, Komatsu and Hitachi

- Consumer Discretionary and property shares are among the decliners in Shanghai; Air China drops following earnings

- Australia’s Flight Centre declines over 11% on profit warning

- Intel weighs on Asian chipmakers

- Intel declines over 7%, guided Q2 results below consensus

- Amazon trades flat in the afterhours following earnings/guidance

- PBoC skipped reverse repo for 5th consecutive session, continues to drain liquidity

- Japan’s March industrial production and unemployment rate disappoint

- Tokyo April Core CPI hits the highest level since 2015

- New Zealand reports record exports in March on dairy products and China

- Aussie Q1 export prices beat ests on iron ore

- Japan PM Abe expected to meet US President Trump on Friday, trade expected to be on the agenda

- Japan’s Golden Week holiday is approaching. Japan's exchanges are due to be closed between April 27 (Saturday) to May 6th (Monday)

Headlines/Economic Data

Australia/New Zealand

- ASX 200 opened -0.1%

- (AU) AUSTRALIA Q1 IMPORT PRICE INDEX Q/Q: -0.5% V 0.4%E; EXPORT PRICE INDEX Q/Q: 4.5% V 3.5%E

- (AU) AUSTRALIA Q1 PPI Q/Q: 0.4% V 0.5% PRIOR; Y/Y: 1.9% V 2.0% PRIOR

- (NZ) New Zealand Mar Trade Balance (NZ$): 922M v 131Me (highest since Apr 2011)

- (NZ) New Zealand Apr Consumer Confidence: 123.2 v 121.8 prior

China/Hong Kong

-Shanghai Composite opens -0.5%, Hang Seng -0.1%

- (US) Reportedly China offers 8 years of IP protections for biologics data (vs 12 years under current US law); US considers concession on drug protections – press

- (CN) CNBC's Javers: "President Trump just told a group of kids: 'We will soon be having President Xi from China coming' to the White House. BUT aides don’t have any information to back that up - telling me 'We don’t have anything to announce.'"

- (CN) China President Xi: Reiterates won't pursue yuan depreciation that harms others

- (CN) China PBoC Open Market Operation (OMO): Skips reverse repo operations for 5th consecutive session: Net: CNY20B drain v CNY80B drain prior

- (CN) China PBoC sets yuan reference rate: 6.7307 v 6.7307 prior

- (CN) Banks in Hangzhou City said to lower home mortgage interest rates - financial press

Japan

- Nikkei 225 opened -0.6%

- (JP) Japan Fin Min Aso: not in favor of linking currency talks with trade talks, we did talk about currency for ~5 minutes; confirmed that we will discuss currency; Yen movement has not impacted trade - comments after talking with Mnuchin

- (JP) Japan Trade Min Motegi: Confirms meetings with USTR Lighheizer; believes it is difficult to come to result this week; No talk of export volume restriction from US on autos

- (JP) BOJ Senior Official: Monetary easing aimed at achieving price target, not at FOREX; natural for monetary policy to vary from country to country

- (JP) Japan Mar Preliminary Industrial Production M/M: -0.9% v 0.0%e; Y/Y: -4.6% v -3.8%e

- (JP) JAPAN MAR JOBLESS RATE 2.5% V 2.4%E

- (JP) Japan Mar Preliminary Retail Sales M/M: 0.2% v 0.0%e; Y/Y: +1.0% v 0.8%e

- (JP) Japan Apr Tokyo CPI Y/Y: 1.4% v 1.1%e; CPI Ex-Fresh Food Y/Y: 1.3% v 1.1%e (highest since 2015)

Korea

- Kospi opened -0.6%

- (KR) Bank of Korea Gov Lee: Does not expect negative growth will continue, domestic economy in difficult situation

- (KR) South Korea Apr Consumer Confidence 101.6 v 99.8 prior (highest reading since Sept 2018)

North America

- (US) White House reportedly pushing for quick action to raise debt ceiling - Wash Post

- (US) White House Econ Adviser Kudlow: Sees Fed moving towards a rate cut - Interview

Levels as of 1:20 ET

- Nikkei 225, -0.4%, ASX 200 flat, Hang Seng +0.2%; Shanghai Composite -0.2%; Kospi -0.6%

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

- EUR 1.1142-1.1124 ; JPY 111.78-111.44 ; AUD 0.7032-0.7002 ;NZD 0.6646-0.6615

- Gold +0.2% at $1,281/oz; Crude Oil -0.6% at $64.83/brl; Copper +0.5% at $2.875/lb