USD/JPY – Tankan, NZ short-end on Gov, China weak data

Asia Market Update: Tech moves; USD/JPY - Tankan, NZ short-end on Gov, China weak data; Aussie miners also weak; CN chipmakers all movers after recent news?

General trend and developments

- Kospi opened sharply lower -2.7%, led by Hynix as Asia followed Wall St’s fall on Friday. US equity FUTs ticked back up somewhat in Asia. SoftBank Group and Advantest declined by >6% in Japan. [Drivers: FRMI comment on Fri morning regarding searching for other potential tenants for power delivery at its Texas site relates to Oracle data center news? AI slide [also] not helped by reports of OpenAI slower-than-expected data center demand (Oracle) and custom chip demand (Broadcom); Weakness in the US comes as further investor rotation out of AI stocks including Nvidia, AMD, Oracle and Broadcom into broader indices such as Russell and DJIA, both hitting all-time highs last week.

- Nvida seems to be taking the bet that China will allow at least some number of its H200 chips to be sold into China through press reports late Friday it was considering increasing production to meet expected Chinese demand.

- China chipmakers down heavily on the Nvidia news.

- Over the weekend China added ~300 steel items to its list of 43 categories of goods requiring export licenses, effective from Jan, 2026. Iron-ore at Dalian Commodities Exchange traded at 5-month lows today. ASX resources index pushed lower, -2.5% on session, with miners BHP -2.9%, RIO -2.5%, and iron ore FUTs also lower and. Gold Miners down big too. Ramelius -6.4%, Regis -4.4%.

- China’s Nov ‘data dump’ shows economic data continuing to worsen but at a steepened pace. Retail Sales a paltry 1.3%, worst since the late-2022 Covid lockdowns. Home prices still sliding inexorably down and Industrial production below 5% again. YTD Fixed Urban Assets -2.6% for the year, the worst since May 2020 (pandemic).

- New Zealand bonds and currency reacted strongly to clear forward guidance from the RBNZ’s new Governor Breman, stating that financial market conditions have tightened since the November decision, beyond what is implied by the bank’s central projection for the OCR. 2-year yields fell -8bps and Kiwi dollar -0.5%, with AUD/NZD jumping back above 115.

- Japan’s Large Manufacturing kept ticking higher in Q4, reaching 15, with the Outlook also hitting the same number. Small Manufacturing Index was highest since Mar, 2019. The govt and BOJ will appreciate that firms cited pass through of costs, robust demand as factors brightening the business outlook. With the BOJ decision coming up on Friday JPY/USD moved +0.4% higher in the hours after the data, heading back towards 155 handle. Nikkei moved further down in anticipation of the potential 25bp hike on Fri.

- The long-running trial of Hong Kong business tycoon Jimmy Lai ended predictably; found guilty of first and second counts of “foreign collusion”.

- Middle East tensions ticked back up a notch as Pres Trump vowed retaliation after two US soldiers and an American civilian interpreter were killed in a terrorist attack in Syria, reportedly carried out by a member of Syria’s own security forces with extreme views. WTI Crude edged up of off two-month lows.

- Thai officials said that hostilities are still being carried out by both Thailand and Cambodia on disputed border territory, despite Pres Trump saying that his weekend phone with the nations’ leaders will see both countries return to the peace accord.

- Bitcoin and crypto rose off of weekend lows.

- Pres Trump told the WSJ that he is preferring either of the two Kevins, Warsh or Hassett, for US Fed Chair. Wants next Fed Chair to consult with him on rates.

- US equity FUTs +0.2% to +0.3% during Asian trading.

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

Note: Australia Treasurer Chalmers: (This) week's Mid-year review [MYFEFO] will not be a mini-budget, will include savings.

- Tue Dec 16th AU Dec Consumer Conf, NZ 6M Fiscal Update, Global Flash PMI’s, (Tue night US Oct & Nov Nonfarm Payrolls, US Oct Retail Sales, US Sept, Oct, Nov Building Permits and Housing Starts).

- Wed Dec 17th NZ Q3 Current Account, JP Nov Trade Balance, TH BOT Rate Decision, ID BI Rate Decision, UK CPI, (Wed night US Nov Retail Sales)

- Thu Dec 18th NZ Q3 GDP, (Thu eve UK and ECB Rate Decisions, US Nov CPI).

- Fri Dec 19th JP Nov CPI, BOJ Rate Decision (Fri night US Nov Existing Home Sales).

Holidays in Asia this week

- No holidays in Asia this week.

Headlines/economic data

Australia/New Zealand

- ASX 200 opens -0.6% at 8,646

- ASIC announces transformational package to safeguard Australia’s financial markets; ASIC imposes additional A$150M capital charge on ASX.

- At least 12 people killed at Bondi Beach, Sydney, Australia, in targeted, mass-shooting terror attack against Jewish celebration of Hanukkah, held at the beach on Sunday evening (overnight update).

- New Zealand Nov Performance Services Index (PSI): 46.9 v 48.4 prior (update, weakest in 6 months).

- RBNZ Gov Breman: Financial market conditions have tightened since the November decision, beyond what is implied by our central projection for the OCR.

China/Hong Kong

- Hang Seng opens -1.0% at 25,718; Shanghai Composite opens -0.6% at 3,865.

- China NBS [China stats agency] Spokesperson: China's economy stabiliized while improving in November - comments on Nov data.

- China Nov industrial production Y/Y: 4.8% V 5.0%E.

- China Nov Retail Sales Y/Y: 1.3% V 2.9%E (lowest since Dec 2022).

- China Nov YTD fixed urban assets Y/Y: -2.6% V -2.3%.

- China Nov YTD Property Investment Y/Y: -15.9% v -15.4%e.

- China Nov Surveyed Jobless Rate: 5.1% v 5.1%e- China Nov New Home Prices M/M: -0.4% v -0.5% prior.

- China economic officials are planning to increase exports and imports in 2026; China Finance Ministry (MOF) is planning to issue ultra-long-term special government bonds next year - financial press.

- China PBOC promises moderately loose monetary policy after Central Economic Work Conference (CEWC) [weekend update].

- China reportedly plans to formulate standards for metaverse industry – press [weekend update].

- China reportedly plans to regulate car sale prices in new guidelines – press [weekend update].

- China reportedly prepares up to $70B in chip sector incentives – press [weekend update].

- China Vice Premier He Lifeng: Vow to crack down on illegal financial activities and prevent risks from property firms [weekend update].

- China NOV M2 money supply Y/Y: 8.0% V 8.2%E [weekend update].

- China Nov YTD aggregate financing (CNY): 33.39T V 33.10TE- China Nov ytd new Yuan loans (CNY): 15.36T V 15.42TE [weekend update].

- China MOFCOM: To export licenses on up to 300 steel items, effective Jan 1st 2026 - statement – press [weekend update].

- (HK) Business tycoon Jimmy Lai found guilty of first and second counts of foreign collusion by Hong Kong Court.

- China Vanke: Plans second bondholders' meeting on Thurs Dec 18th to avoid onshore default.

- NVDA said to consider increasing h200 chip production capacity due to Chinese demand – press [weekend update].

- China PBOC sets Yuan reference rate: 7.0656 v 7.0638 prior.

- China PBOC Open Market Operation (OMO): Injects CNY130.9B in 7-day Reverse Repos; Net injects CNY8.6B v drains CNY19.3B prior.

Japan

- Nikkei 225 opens -0.9% at 50,412.

- Japan Q4 tankan large Manufacturing index: 15 V 15E; large Manufacturing outlook: 15 V 13E.

- Bank of Japan (BOJ): Releases companies' stance on wage growth in FY26; Firms expect to raise wages in FY26 at about the same rates as in FY25- China MOFCOM: To sanction Former Japan Chief of Staff for Japan Self-Defense Forces, Iwasaki.

- BOJ said to see tightening cycle extending beyond 0.75% and are no closer to determining neutral rate - press [weekend update].

- Japan Fin Min Official: Participants at today’s primary dealers meeting said reduction in sales of super-long JGBs is desirable [weekend update].

Korea

- Kospi opens -2.7% at 4,053.

- South Korea financial regulator extends bond market stabilization programmes through 2026 - financial press.

Other Asia

- Thailand Fin Min Ekniti: Strong baht driven by capital inflows; To discuss how to handle strong baht with BOT (Central bank) - financial press.

- (TH) US Pres Trump: Confirms talks with Thailand and Cambodia PMs, countries will return to peace accord - Truth Social post [weekend update].

North America

- (CL) Right-wing candidate Jose Kast wins Chile Presidential run-off election in landslide with ~58% of vote vs ~42% for Communist Party's Jeannette Jara (update).

- WorldACD Weekly Air Cargo Trends (week 49): Spot rates rise a further +3% in first week of December [weekend update].

- (SY) Two US Army soldiers and one civilian US interpreter were killed in Syria [weekend update].

- (US) Pres Trump isn't certain about whether Republicans can maintain control of the House in midterm elections because some of his economic policies have yet to take full effect; (But) by the time we have to talk about the midterms, which is another few months away, I think prices will be in good shape - WSJ interview [weekend update].

- (US) Trump says he is leaning towards Warsh or Hassett for Fed Chair; Interest rates should be at 1% or lower a year from now; Next Fed Chair should consult with Trump on interest rates - WSJ interview [weekend update].

Europe

- (UK) Dec Rightmove House Prices M/M: -1.8% v -1.8% prior; Y/Y: -0.6% v -0.5% prior - update.

- (EU) ECB's Cipollone (Italy): Roadmap for euro digitale: regulatory text by end-2026, build and test infrastructure in H1 2027, pilot from September 2027, full issuance in 2029. [weekend update].

Levels as of 01:20 ET

- Nikkei 225 -1.1%; ASX 200 -0.7%; Hang Seng -1.2%; Shanghai Composite -0.1%; Kospi -1.8%.

- Equity S&P500 Futures +0.3%; Nasdaq100 +0.2%; DAX +0.5%; FTSE100 -0.3%.

- EUR 1.1731.117.49; JPY 155.19-155.99; AUD 0.6639-0.6656; NZD 0.5766-5809.

- Gold +0.7% at $4,359/oz; BTC -0.6% at $89,705; Crude Oil +0.5% at $57.54/bbl; Copper +0.7% at $5.3950/lb.