JPY higher on BoJ's Takata comments, AUD higher despite mixed data

Asia Market Update: JPY higher on BOJ's Takata comments; AUD higher despite mixed data; CN continues focus on global gold trading; Focus on US Core PCE tonight.

General trend

- Mixed data out of Japan with Industrial Production m/m coming in worse than expectations, but Retail Sales beating expectations.

- However, it was BOJ member Takata that sent JPY/USD sharply higher +0.5% back below 150 on comments centered around the BOJs price target ‘coming into sight’.

- Australia January Retail Sales were some way below estimates, with Aussie yields also falling 4pbs as the Australian Treasurer warned next week’s Q4 GDP data likely to be 'quite weak’ – and yet the Aussie dollar gained back half of its losses of yesterday (in tandem with the kiwi falling 1% yesterday). Q4 Private Capex did increase, however.

-The kiwi itself attempted to claw back a little of its losses yesterday after Gov Orr’s comments amid a rate hold and reduced terminal OCR.

- China continues to attempt to make inroads into the global gold trading environment, with the Shanghai Gold Exchange lowering margin requirements for certain gold contracts.

- US equity FUTs down slightly during Asian trading.

Looking ahead (Asian time zone)

- Thu 29th, (Thu night) IN Q4 GDP, DE Feb inflation, CA Q4 GDP, US PCE + Personal Spending + Feb initial Jobless.

- Fri 1st JP Mnfg PMI, CN NBS Mnfg PMI + Caixin Mfg PMI, JP Consumer Confidence, (Fri night) EU Feb Inflation, US ISM Mnfg & Services PMI,

Holidays in Asia this week

- Mar 1st Fri South Korea.

Headlines/economic data

Australia/New Zealand

- ASX 200 opens flat at 7,660.

- AUSTRALIA JAN RETAIL SALES M/M: 1.1% V 1.5%E.

- AUSTRALIA Q4 PRIVATE CAPEX: 0.8% V 0.5%E.

- Australia Jan Private Sector Credit M/M: 0.4% v 0.4%e; Y/Y: 4.9% v 4.8% prior.

- Australian Treasurer Chalmers: Australia Q4 GDP data likely to be 'quite weak'; Global, local soft landing is assumed but not assured.

- China Foreign Min Wang Yi has been invited to Australia to discuss unresolved issues; the visit is expected to occur in the latter half of Mar - HK press.

- New Zealand Feb ANZ Business Confidence: 34.7 v 36.6 prior - update.

- RBNZ Gov Orr: As aggregate demand has slowed it has been harder to pass cost increases on.

China/Hong Kong

- Hang Seng opens -0.7% at 16,429.

- Shanghai Composite opens -0.5% at 2,943.

- China Financial Futures Exchange: Punished Chinese hedge fund for 'excessive trading'.

- Shanghai Gold Exchange: To lower margin requirements for certain gold contracts to 8% from 10%, effective Mar 1.

- China Securities Regulator (CSRC): Vow to enhance law enforcement efficiency (overnight update).

- China Premier Li: Decoupling and building fences does not conform with fundamental interests of both sides.

- CAICT: China Jan Smartphone Shipments +61.4% y/y (overnight update).

- Reportedly a delegation led by US Chamber of Commerce is visiting China from Feb 27-29th at the invitation of China Council for the Promotion of International Trade (CCPIT) - Global Times (overnight update).

- Reportedly China regulators told some quantitative funds to stop taking new investments from clients and phase out existing Direct market access (DMA) products – press (overnight update).

- China PBOC sets Yuan reference rate: 7.1036 v 7.1075 prior.

- China PBOC Open Market Operation (OMO): Sells CNY117B in 7-day reverse repos; Net injects CNY59B v injects CNY275B prior.

Japan

- Nikkei 225 opens -0.7% at 38,935.

- JAPAN JAN PRELIMINARY INDUSTRIAL PRODUCTION M/M: -7.5% V -6.8%E; Y/Y: -1.5% V -1.6%E.

- JAPAN JAN RETAIL SALES M/M: 0.8% V 0.5%E; Y/Y: 2.3% V 2.0%E.

- Bank of Japan (BOJ) Takata: Price target is finally coming into sight.

- JAPAN SELLS ¥2.9T VS. ¥2.9T INDICATED IN 2-YEAR JGB BONDS; AVG YIELD: 0.1870% V 0.0750% PRIOR; BID-TO-COVER: 3.62X V 3.74X PRIOR.

- Japan Top FX Diplomat Kanda: Told G20 excessive volatility in FX is undesirable; won't comment on recent FX.

- Japan's University of Tokyo top professor and BOJ counselor Yoshikawa: Of course it’s time for the BOJ to normalize policy; BOJ should make straightforward policy shift [**Note: Yoshikawa said to be a friend of BOJ Gov. Kazuo Ueda for more than five decades] (overnight update).

South Korea

- Kospi opens -0.3% at 2,643.

- South Korea: No plans to privatize healthcare.

Other Asia

- Singapore Jan M2 Money Supply Y/Y: 5.3% v 4.7% prior; M1 Money Supply Y/Y: 6.3% v 2.1% prior.

- Vietnam Feb Trade Balance: $1.1B v $1.5Be.

- Vietnam Feb CPI Y/Y: 4.0% v 3.4%e.

- Vietnam Feb Retail Sales Y/Y: 8.5% v 8.1% prior.

- Vietnam Feb Industrial Production Y/Y: -6.8% v 18.3% prior.

- Philippines Central Bank (BSP): Sees Feb Y/Y inflation within the 2.8-3.6% range.

- Indonesia Central Bank (BI) Dep Gov Agung: Will not adjust policy rate yet due to global uncertainty - financial press.

- Indonesia aims to resolve mining work plan issues by the end of March – Ministry.

- Thailand Jan ISIC Manufacturing Production Y/Y: -2.9% v -5.0%e.

North America

- Reportedly US Congressional leaders have reached an agreement regarding government funding - Politico.

- Fed's Williams (voter): Will let incoming economic data decide on monetary policy path; Still some ways to go to get to 2% inflation target.

- Fed’s Bostic (dove, voter): Reiterates sees first rate cut in Summer; Still work to do on inflation, haven't declared victory - Q&A.

- Fed's Collins (non-voter): Premature to think Fed could cut in May; Reiterates will be appropriate to begin easing policy later this year.

- Q4 PRELIMINARY GDP PRICE INDEX: Q/Q: 1.6% V 1.5%E; CORE PCE Q/Q: 2.1% V 2.0%E.

- JAN PRELIMINARY WHOLESALE INVENTORIES M/M: -0.1% V 0.2%E; Retail Inventories M/M: 0.5% v 0.4%e.

- Q4 PRELIMINARY GDP ANNUALIZED Q/Q: 3.2% V 3.3%E; PERSONAL CONSUMPTION: 3.0% V 2.7%E.

- JAN ADVANCE GOODS TRADE BALANCE: -$90.2B V -$88.5BE.

- DOE CRUDE: +4.2M V +2.7ME; GASOLINE: -2.8M V -1.3ME; DISTILLATE: -0.5M V -2.0ME.

- Fed's Logan (non-voter): Need to disconnect idea of slower runoff pace and ending QT.

Europe

- (UK) Feb Lloyds Business Barometer: 42 v 44 prior.

- ECB's Vasle (Slovenia, hawk): ECB looking at rate-cutting phase if no big surprises.

- ECB's Kazaks (Latvia, hawk, voter): Warns ECB against moving too early on rates, like in 70s and 80s; Don't want to discuss specific dates.

- ECB's Simkus (Lithuania): June is the time to consider ECB rate cut.

- Moldova's pro-Russian Transnistria breakaway region asks Russia to protect it against Moldova pressure - press (as speculated).

Levels as of 00:20 ET

- Nikkei 225 -0.1% ; ASX 200 +0.5% ; Hang Seng +0.1$; Shanghai Composite +1.0%; Kospi -0.4%.

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

- EUR 1.0828-1.0842; JPY 149.70-150.70; AUD 0.6491-0.6522; NZD 0.6809-0.6111.

- Gold flat at $2,042/oz; Crude Oil flat at $78.51/brl; Copper +0.3% at $3.8520/lb.