JP equities back to leading Asia

Asia market update: JP equities back to leading Asia; CN ‘data dump’ mixed; Focus on BOJ & RBA rate decisions tomorrow.

General trend

- Nikkei up over 2% with broad gains led early by Rakuten +5% and Nissan +5%. Chipmakers and exporters also up, with Topix +1.3% ahead of Japan's BOJ decision tomorrow.

- China’s ‘data dump’ for Feb (combined Jan-Feb YTD due to Lunar New Year holiday last month) saw Industrial Production and Fixed Assets Urban well above estimates, while Retail Sales marginally lower than ests.

- USD generally firmer and back up over 149 against JPY amid the backdrop of the BOJ rate decision tomorrow. Overnight volatility in USD/JPY jumps to >15%.

- After Friday’s close Japan’s largest union (Rengo) confirmed the largest annual wage hike in over 30 years.

- Over the weekend China for month of Feb produced its lowest M1 Money Supply figure since Jan 2022, while New Yuan Loans and Aggregate Financing for Feb were also below estimates.

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

Looking ahead (Asian time zone)

- Tue Mar 19th BOJ & RBA rate decisions, (Tue eve DE Econ Sentiment).

- Wed Mar 20th CN LPR rate, (Wed eve UK CPI, late night Fed rate decision).

- Thu Mar 21st AU PMIs, Employment, JP Balance of Trade & PMIs, Thu evening BOE rate decision).

- Fri Mar 22nd JP CPI (Fri eve UK Retail Sales).

Holidays in Asia this week

- Wed Mar 20th, Japan.

Headlines/economic data

Australia/New Zealand

- ASX 200 opens +0.1% at 7,673.

- New Zealand Feb Non-Resident Bond Holdings: 62.6% v 61.6% prior.

- New Zealand Feb Performance of Services Index: 53.0 v 52.2 prior.

- New Zealand PM Luxon: We are seeing deteriorating economic conditions - NZ press.

- NZIER Economists cuts 2023-24 GDP +0.5%; 2024-25 GDP +0.8% - Quarterly Survey.

- RBNZ publishes assessment of Capital Review implementation; Over previous 2 years, all NZ banks have met the increased capital requirements.

China/Hong Kong

- Hang Seng opens -0.2% at 16,690.

- Shanghai Composite opens +0.1% at 3,057.

- China Feb industrial production Y/Y: 7.0% V 5.3%E (note: Combined Jan-Feb YTD release due to lunar new year holidays last month).

- China Feb Retail Sales YTD Y/Y: 5.5% V 5.6%E (note: combined Jan-Feb YTD release due to lunar new year holidays during Feb).

- China Feb YTD fixed urban assets Y/Y: 4.2% V 3.2%E.

- China Feb YTD Property Investment Y/Y: -9.0% v -8.0%e.

- China Feb Surveyed Jobless Rate: 5.3% v 5.1%e.

- China National Bureau of Statistics (NBS): With current macro policies taking effect the economy continued to recover and turn for the better - comments on combined Jan-Feb data.

- China Feb new Yuan loans (CNY): 1.45T V 1.550TE (**Note calculated from YTD figure) [weekend update].

- China Feb aggregate financing (CNY): 1.56T V 2.340TE (**Note calculated from YTD figure) [weekend update].

- China Feb M2 money supply Y/Y: 8.7% V 8.8%E (M1 Money Supply Y/Y: 1.2% v 2.0%e - lowest since Jan 2022) [weekend update].

- China Securities Regulator (CSRC) issues draft guidelines on strengthening supervision of listed firms.

- Chinese govt reportedly has asked local EV makers including BYD and Geely to sharply increase purchases from local auto chipmakers – press [weekend update].

- China FX Regulator SAFE: Major economies are expected to shift monetary policy stance in 2024 and ease conditions [weekend update].

- China Feb Client FX Net Settlement (CNY): -43.1B v -31.1B prior [weekend update].

- China PBOC sets Yuan reference rate: 7.0943 v 7.0975 prior.

- China PBOC Open Market Operation (OMO): Sells CNY10B in 7-day reverse repos; Net CNY0B v Net CNY0B prior.

Japan

- Nikkei 225 opens +0.7% at 38,960.

- Japan Jan Core Machine Orders M/M: -1.7% v -0.8%e; Y/Y: -10.9% v -10.5%e.

- Japan BOJ offers to buy ¥3.0T in JGB Repurchase Future operation.

- Japan 1-month bill yield rises to +0.010%, the yield turns positive for the first time since 2016 (BOJ decision due on Tues [Mar 19th]).

- USD/JPY overnight implied volatility rose to >15.0% (highest since Jan); BOJ decision due on Tues [Mar 19th] - financial press.

- Japan sells ¥3.5T v ¥3.5T indicated in 12-Month Bills; Avg Yield: 0.1051% v 0.0129% prior; bid-to-cover: 3.35x v 2.89x prior.

Tawian Semi (TSM) Reportedly looking to build advanced packaging capacity in Japan - Japanese press.

- BOJ leaning toward guiding short term rate to 0.0-0.1% range during rising wages – Nikkei [weekend update].

- Japan's Rengo Union [largest trade union in Japan]: 1st round of FY24 annual wage hikes at 5.28% v 3.80% y/y (largest in 30 years and first time above 5% since 1991); Base pay to rise 3.70% v 2.33% y/y [**Note: last key data point ahead of BOJ meeting next week] [weekend update].

South Korea

- Kospi opens +0.4% at 2,678.

Other Asia

- Malaysia Feb Trade Balance (MYR): 10.9B v 12.3Be.

- Singapore Feb Non-oil Domestic Exports M/M: -4.8% v -0.8%e; Y/Y: -0.1% v 4.7%e.

- Indonesia Central Bank forecast to hold interest rates for a fifth month on Mar 20 but cut by 25bps in Q2, 2024 - Financial press poll of economists.

- Prosecutors in the US said to broaden probe of Adani Group – US financial press [update].

North America

- (US) Tier 1 banks pare US Fed rate cut expectations for 2024.

- (US) RDDT IPO said to be between 4-5 times oversubscribed; Likely to attain the $6.5B valuation sought after - Financial press.

- Note: Next catalyst for NVDA is GPU Technology Conference on Mar 18th, including Keynote address at 4pmET with potential price and/or performance details on its pipeline (B100, x100, GB200, BlueField products, etc.), followed by an analysts’ meeting scheduled for Tues 3/19 at 11:30am ET.

Europe

- (UK) Mar Rightmove House Prices M/M: 1.5% v 0.9% prior; Y/Y: 0.8% v 0.1% prior.

- (RU) Russia President Putin comments after election victory: Nobody will succeed in suppressing Russia.

- (RU) Pres Putin wins Russian elections with 87.8% of vote (Highest ever percentage post-Soviet Union).

Levels as of 00:20 ET

- Nikkei 225, +2.3%, ASX 200 +0.1%, Hang Seng +0.1%; Shanghai Composite +0.6%; Kospi +0.4%.

- Equity S&P500 Futures: +0.3%; Nasdaq100 +0.4%, Dax +0.1; FTSE100 flat.

- EUR 1.0880-1.0892; JPY 148.90-149.33; AUD 0.6554-0.6570; NZD 0.6080-0.6099.

- Gold -0.5% at $2,150/oz; Crude Oil +0.4% at $80.92/brl; Copper -0.3% at $4.1092lb.