USD/JPY rose on BOJ’s fixed-rate JGB operation, the operation again had no takers

Asia Market Update: Equities trade mixed; CN and HK markets rebound despite Shanghai’s lockdown measures; USD/JPY rose on BOJ’s fixed-rate JGB operation, the operation again had no takers; BOJ later announced 2nd fixed rate op.

General trend

- UST yields extend rise led by 2-year; USD trades generally firmer; CHF tracks the decline in the JPY.

- NZD lags amid cautious analyst comments.

- AUD rises ahead of budget.

- WTI Crude FUTS decline by >3%; Russia/Ukraine talks continue.

- US equity FUTs decline.

- Nikkei 225 has pared decline amid the weaker Yen.

- Resources and Financial firms outperform in Australia.

- Australia is due to release budget statement on Tues (Mar 29th).

- BOJ expected to release Rinban schedule this week.

Headlines/Economic data

Australia/New Zealand

- ASX 200 opened +0.2%.

- (AU) Australia Q1 NAB Business Confidence 9 v 14 prior - Financial Press.

- (NZ) Westpac says financial markets appear to be overpricing the extent of Reserve Bank of New Zealand (RBNZ) rate hikes over the next couple of years - financial press.

Japan

- Nikkei 225 opened -0.2%.

- (JP) Bank of Japan (BOJ) offers to buy 5-10 year JGBs at fixed rate of 25bps; Opens window to buy unlimited amount of 10-year JGBs at 0.25%.

- (JP) Japan Cabinet approval rating at 61%, + 6 pct points - Nikkei poll.

- (JP) Bank of Japan (BOJ) Statement: Made offer to purchase 10 year JGBs due to recent moves in long term interest rates, need to guide the 10-year yield to ~0.0%.

- (JP) Bank of Japan (BOJ) notes no one has taken up offer on purchases of unlimited 5-10 year JGBs [in line with Feb 14th fixed-rate operation]

- (JP) 10-year JGB yield trades at 0.25%, high end of BOJ target range (-0.25% to +0.25%).

- (JP) BOJ Offers to buy unlimited amount of 5-10 year JBGS via fixed rate method (2nd operation during the session).

Korea

- Kospi opened -0.3%.

- (KR) North Korea said to 'accelerate' the restoration of demolished nuclear test site - South Korea press- (KR) South Korea sells KRW2.8T in 5-year bonds.

China/Hong Kong

- Hang Seng opened flat; Shanghai Composite opened -0.8%.

- (CN) China PBOC sets Yuan reference rate: 6.3732 v 6.3739 prior.

- (CN) China PBOC Open Market Operation (OMO): Sells CNY150B in 7-day reverse repos v CNY20B prior; Net inject CNY120B v Net inject CNY70B prior.

- (CN) Shanghai Exchange to offer services online during lockdown; Extending time window of listed company releases.

- (CN) China auctions off 546Kt of wheat from state reserves.

- (CN) China Economic Daily: China needs additional steps to stabilize trade.

- (CN) China Securities Times: More timely monetary policy support is needed.

- (CN) China bond defaults were near CNY8.0B as of Mar 25th, down >90% y/y; cites analysts and industry data - Shanghai Securities News.

- (CN) Shanghai Exchange Issued the Interim Measures for the Listing and Trading of Depository Receipts under the Stock Connect Scheme between Shanghai Stock Exchange and Overseas Stock Exchanges and Relevant Guidelines.

- (CN) Follow Up: Shanghai institutes requirement to have a negative coronavirus test to leave the city.

- (CN) Follow Up: Shanghai suspends land sales as of today (Mar 28) as additional coronavirus measures.

- (CN) China Feb YTD Industrial Profits Y/Y: 5.0% v 178.9% prior.

- (CN) Former PBOC Advisor Yu urges China to decrease holdings in US Treasuries.

- (CN) China State Media: US and China are working 'hard' on solution to audit dispute.

North America

- TSLA Follow Up: Suspending production in Shanghai for at least 4 days (prior 1) due to coronavirus lockdown rules - Press.

- (US) Economist note that the US Fed's best track could be a growth recession, in order to address inflation - financial press.

- (US) Analysts note that high grade bond sales are on track to >$200B in March, which would make it one of the highest 4 months on record - financial press.

- (US) US 5-year and 30-year yield curve inverts for the first time in 16 years (since 2006).

Europe

- (IE) Ireland Mar Economic Pulse: 84.4 v 88.1 prior.

- (IR) EU's Borrell said nuclear agreement with Iran is 'very close', believes a deal could be reached 'in a matter of days' - Press.

- (EU) ECB's Lagarde reiterated does not see risk of stagflation - financial press.

- (UR) Ukraine President Zelensky: Need more support from EU, requesting more military equipment from NATO; We are ready to discuss neutrality, non nuclear status of backed by security guarantees - Russian non-state media press interview.

- (UK) Govt expected to announce new regulations on stablecoins within the next few weeks - press.

- (RU) Head of Luhansk separatists republic Pasechnik: Referendum on absorption by Russia could happen in near future.

- (DE) German Chancellor Scholz: We are prepared if Russia cuts off gas supply, extending nuclear power won't help Germany much.

Levels as of 01:20 ET

- Nikkei 225, -0.6, ASX 200 +0.1% , Hang Seng +1.2%; Shanghai Composite -0.1% ; Kospi flat.

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

- EUR 1.0988-1.0950 ; JPY 123.16-122.02 ; AUD 0.7533-0.7498 ;NZD 0.6971-0.6940.

- Gold -0.5% at $1,943/oz; Crude Oil -3.1% at $110.38/brl; Copper -0.8% at $4.6553/lb.