Mixed equities on light holiday trading as JP yield curve slightly flattens amid likely further

Asia Market Update: Mixed equities on light holiday trading as JP yield curve slightly flattens amid likely further short-end issuance; CME outage affects FUTs trading.

General trend and developments

- On a light day's trading with US out for Thanksgiving, Tokyo CPI continued its multi-year print above the BOJ’s target level of 2%, the day after BOJ’s Noguchi said that underlying inflation in Japan has still not hit 2% target, despite three years of CPI prints above target.

- Japan’s industrial production figures much better than expected, with October producing a solid print when a contraction was forecast, while Retail Sales in October also hotter than expected.

- Japan yield curve slightly flattened with the front-end rising a little more than the long-end after the Japan MOF met with Primary dealers last night, reporting that dealers seek more 2-year, 5-year and 10-year bond sales and less from super-long end sales. Comes on top of reporting yesterday that the MOF was likely to increase issuance of 2 and 5 year JGBs from Jan 2026 in a revised bond sale plan for FY25.

- Japan 2-year auction had a narrow tail of only 1bp, but the bid-to-cover was below 12-month avg of 3.70x.

- More good economic news out of New Zealand, with Consumer Confidence rising in November, not far off 100 level.

- South Korea industrial production in October unexpectedly fell sharply into contraction: The ministry said the decline was driven largely by a strong base effect, as chip production had surged around 20 percent on-month in September. Semiconductor production plunged 26.5%, marking the sharpest on-month drop since October 1982, when it fell 33.3%.

- Comes as Korean Won holds onto yesterday’s gains following the slightly less dovish BOK statement saying that the BOK is now balanced between holding and cutting.

- Kospi underperfomed -1.7%; dividend tax only cut to 30%, 25% had been speculated in October.

- Record 24% of China-based companies posted losses in first nine months of 2025. Comes after China industrial profits fell more than 5% in October.

- Further issues for embattled property developer China Vanke as several of their Yuan-denominated bond fall >20%, triggering trading suspensions. Comes the day after two Chinese banks reportedly reject company’s loan request. Company share price has now fallen to Sept 2008 levels.

- CME Group futures trading was halted due to technical issues with its cooling systems vendor. Outage affected Globex Futures, S&P500 and Nasdaq FUTs and options as well as the LSEG in London and the Malaysia bourses at minimum.

- Taiwan FSC said that Taiwanese insurers need to about triple their current reserves in order to have a ‘safe level’ of FX buffers.

- Gold rose to levels not seen since mid-Nov.

- US Pres. Trump said he will permanently pause migration from all Third World Countries. Follows the shooting of two National Guards in DC yesterday.

- US equity FUTs up slightly during Asian trading.

Looking ahead (Asian-weighted releases, using Asian time zone)

- Fri Nov 28th (Fri eve: various EU Nov prelim CPI).

- Sat Nov 19th CN NBS Nov Manufacturing PMI.

Holidays in Asia this week

- Mon Nov 24th Japan.

- Thu Nov 27th US Thanksgiving (US time).

- Fri Nov 28th US Thanksgiving half-day (early close, US time).

Headlines/economic data

Australia/New Zealand

- ASX 200 opens -0.3% at 8,588.

- Australia Oct Private Sector Credit M/M: 0.7% v 0.6%e; Y/Y: 7.3% v 7.3% prior.

- Australia Underlying Cash Deficit in 4M to Oct (A$): 32.9B.

- Australia sells A$1.2B vs. A$1.2B indicated in 3.75% Apr 2037 bonds; Avg Yield: 4.5833% v 4.2678% prior; bid-to-cover: 3.49x v 2.85x prior.

- New Zealand Oct Filled Jobs M/M: 0.0% v 0.2% prior.

- New Zealand Nov ANZ Consumer Confidence Index: 98.4 v 92.4 prior -update.

China/Hong Kong

- Hang Seng opens +0.3% at 26,011; Shanghai Composite opens -0.1% at 3,870.

- China Vanke (2202.HK) Jan 2028 and Mar 2027 Yuan-denominated bond fall >20%, trading suspended;

- China 1-day interbank repo rate falls to 1.2935%, lowest since Aug, 2023.

- China reportedly seeks France's support against Japan PM comments on Taiwan; Urges to abide by 'One-China' principle – press.

- (EU) Trade Commissioner Sefcovic: Talked to China's Wang Wentao on export controls; Talks with China are advancing well [overnight update].

- Hong Kong fire dept reports >50 deaths from residential fire in 1980's era Wan Fuk Court, with 71 injured and >200 still missing [overnight update].

- China PBOC sets Yuan reference rate: 7.0789 v 7.0779 prior.

- China PBOC Open Market Operation (OMO): Injects CNY301B in 7-day Reverse Repos; Net drains CNY74B v injects CNY56B prior.

Japan

- Nikkei 225 opens +0.1% at 50,218.

- JAPAN NOV TOKYO CPI Y/Y: 2.7% V 2.7%E; CPI (EX-FRESH FOOD) Y/Y: 2.8% V 2.7%E.

- JAPAN OCT PRELIMINARY INDUSTRIAL PRODUCTION M/M: +1.4% V -0.6%E; Y/Y: +1.5% V -0.5%E.

- JAPAN OCT RETAIL SALES M/M: 1.6% V 0.8%E; Y/Y: 1.7% V 0.8%E.

- Japan Oct Jobless Rate: 2.6% v 2.5%e.

- Japan releases weekly flows data [period ended Nov 21st]: Foreign buying of Japan equities: -¥348.7B v +¥1.02T prior; Japan buying of foreign bonds: ¥576.5B v ¥354.2B prior.

- JAPAN SELLS ¥2.7T VS. ¥2.7T INDICATED IN 2-YEAR JGB BONDS; AVG YIELD: 0.9930% V 0.9320% PRIOR; BID-TO-COVER: 3.53X V 4.35X PRIOR (lower than 12-month avg of 3.70X).

- Japan sells ¥4.3T vs. ¥4.3T indicated in 3-month bills; Avg Yield: 0.5187% v 0.4766% prior; Bid-to-cover: 2.61 v 2.96x prior.

- Japan MOF: Primary dealers seek more 2-year, 5-year and 10-year bond sales and less from super-long end sales [overnight update].

- Japan Chief Cabinet Sec Kihara: Not true that Trump advised PM Takaichi to not provoke China over Taiwan (as per WSJ article) – press [overnight update].

- Reportedly Japan PM Takaichi set to secure a majority in the lower house of parliament with a small caucus joining her ruling coalition - local press [overnight update].

- Japan PM Takaichi: Necessary budget items should be included in initial budget; Aim to reflect inflation appropriately in FY26 budget [overnight update].

Korea

- Kospi opens +0.2% at 3,995.

- South Korea Oct Industrial Production M/M: -4.0% v 0.3%e; Y/Y: -8.1% v -0.6%e.

- South Korea President Lee is seeking to visit China during Jan - South Korea press.

- Korea Vice Foreign Min said to be travelling to US to discuss next steps on security, tariffs - local press report.

- Bank of Korea (BOK): Foreign currency deposits have largest drop in almost 2 years in Oct – Yonhap.

- South Korea lawmakers agree to cut the dividend tax rate to 30% - Local press.

Other Asia

- Singapore MAS and Japan BOJ renew bilateral local currency swap to Nov 2028 - financial press.

- Singapore Oct M2 Money Supply Y/Y: 7.1% v 8.5% prior.

- Philippines Oct Trade Balance: -$3.8B v -$4.4Be.

- Taiwan FSC: Insurers need NT$1.0T (~$32B) FX buffer 'to reach a safe level' - Taiwan press.

- Taiwan Oct Leading Monitoring Indicator: 35 v 34 prior.

- Philippines Central Bank (BSP) Gov Remolona: S&P affirming our rating at 'BBB+' confirms our favorable GDP outlook.

North America

*CME GROUP FUTURES TRADING HALTED; Due to technical issues, the CME Globex Futures & Options markets have been halted.

- (US) Pres Trump: Hot stock market is big for 401Ks; Will continue all-time highs - virtual comments to US troops.

- US) Pres. Trump: Even as we have progressed technologically, Immigration Policy has eroded those gains... I will permanently pause migration from all Third World Countries - post on Truth Social.

Europe

- LSEG says no trades on S&P500 or Nasdaq FUTs since 03:44 GMT.

- (UK) Nov Lloyds Business Barometer: 42 v 47e.

- (IE) Ireland Nov Consumer Confidence Index: 61.0 v 59.9 prior.

- OPEC+ expected to hold oil output policy steady for Q1 2026 at meeting on Sun, Nov 29th - sources.

- ECB's Schnabel (Germany): See risks to EUR/USD exchange rate as more balanced.

- (RU) Russia Pres Putin: US peace plan could be basis for Ukraine deal; We need to discuss some things and there is no final draft of peace plan.

- ECB PUBLISHES ACCOUNT OF OCT RATE DECISION (AKA MINUTES).

- (EU) Euro Zone Nov Economic Confidence: 97.0 v 97.0e; Industrial Confidence: -9.3 v - 8.3e; Services Confidence: 5.7 v 4.4e: Consumer Confidence (final): -14.2 v -14.2 advance.

- (DE) Germany Dec GfK Consumer Confidence: 23.2 v -23.5e.

Levels as of 01:20 ET

- Nikkei 225 -0.1%, ASX 200 +0.1%; Hang Seng -0.3%; Shanghai Composite +0.1%; Kospi -1.7%.

- Equity S&P500 Futures +0.1%; Nasdaq100 +0.2%; DAX flat; FTSE100 -0.1%.

- Gold +0.8% at $4,221/oz; BTC +0.5% at $91,562; Crude Oil -0.1% at $59.05bbl; Copper +0.4% at $5.1840/lb.