Japan manufacturing PMI returns to expansion

Asia Mid-Session Market Update: Japan manufacturing PMI returns to expansion as cabinet officials resume jawboning against Yen strength

Top US session headlines

- (US) AUG EXISTING HOME SALES: 5.33M V 5.45ME

- (US) INITIAL JOBLESS CLAIMS: 252K V 261KE; CONTINUING CLAIMS: 2.11M V 2.14ME (lowest initial jobless claims since April)

- Reportedly no breakthrough reached at OPEC meeting in Vienna ahead of meeting in Algeria next week - press

- (US) TREASURY $11B 10-YEAR TIPS REOPENING DRAW 0.052%; BID TO COVER 2.59 V 2.27 PRIOR AND 2.38 AVG OVER THE LAST 4 (highest BTC since May 2014)

- YHOO: Confirms certain data from 500M user accounts was stolen, including hashed passwords, names and email addresses

Asia Notes/Observations

- Volatility is compressed for the 2nd day and US yield curve flattens as markets process FOMC ripple and settle on 50-50 chance of December hike.

- Nikkei returns from holiday with a down day amid catch-up to Yen bid on BOJ policy change

- Oil pares gains on diminished prospects of Algiers agreement for any supply shift

- NZD still under pressure in the extended wake of more dovish than expected RBNZ; other USD majors in narrow ranges

- Japan PMI surprises to the upside with first expansion in 7 months; Output up for 2nd month and Employment rises to 4-month highs

- Japan Fin Min acknowledges not much impact anticipated from latest BOJ move; Cabinet Sec Suga warns govt watching market moves and Yen direction following BOJ and FOMC

- North Korea Army spokesperson threatens to strike Guam and Seoul if US flies its B-1B bombers over Korea

US markets on close: Dow +0.5%, S&P500 +0.7%, Nasdaq +0.8%

- Best Sector in S&P500: Consumer Discretionary

- Worst Sector in S&P500: Basic Materials

- Biggest gainers: WY +5.7%, RIG +5.6%, DISCA +4.8%, FTR +4.8%, RCL +4.6%

- Biggest losers: EQR -2.5%, SWN -2.3%, LVLT -2.1%, KSS -1.9%, PXD -1.8%

VIX 12.0 (-1.3pts); Treasuries: 2-yr 0.77% (-1bp), 10-yr 1.63% (-4bp), 30-yr 2.35% (-4bp)

US movers afterhours

- MIFI +29.8%; Pact to Sell Mobile Broadband Unit

- BATS +28.5%; CBOE reportedly in discussions to acquire BATS Global - press

- IMPV +16.4%; Said to Draw Acquisition Interest

- AIR +4.8%; 1Q EPS Cont. Operations, Sales Beat Ests.

- FB -1.4%; Said to have overestimated video ads' viewing time by as much as 60-80% for 2 years - financial press

- ENPH -21.0%; Will Cut 11% of Workforce, Offer Stock

After extended session

- GM: Chevrolet to begin offering all-new Equinox SUV model in China - financial press

Equity Futures (23:30ET): S&P e-mini flat, Dax flat, FTSE100 -0.1%

FX/Commodities (23:30ET):

- EUR 1.1195-1.1210; JPY 100.70-101.25; AUD 0.7630-0.7650, NZD 0.7275-0.7315

- Gold -0.2% at 1,338; Oil -1.1% at $45.81/brl; Copper -0.2% at $2.19/lb

- GLD: SPDR Gold Trust ETF daily holdings rise 6.5 tonnes to 950.9 tonnes; Highest since Sept 7th

Asian Equity Markets (23:30ET)

- Nikkei -0.1%, Hang Seng +0.1%, ASX +0.7%, Shanghai -0.1%, Kospi +0.1%

Key economic data:

- (JP) JAPAN SEPT PRELIMINARY PMI MANUFACTURING: 50.3 V 49.5 PRIOR; first expansion in 7 months

- (HK) Macau Aug visitor arrivals: 2.88M, +3.1% y/y

Speakers/Press

China:

- (CN) Former China vice housing minister Qiu Baoxing warns about risk of overheating property sector - Chinese press

- (CN) Moody's: China developers will have stable margins in 2016 v 2015

- (CN) China State Administration of Foreign Exchange (SAFE) official: No basis for long term Yuan depreciation - financial press

Japan:

- (JP) Japan Chief Cabinet Sec Suga: Will continue to watch market moves, fx moves are very sensitive

- (JP) Japan Fin Min Aso: Reiterates Govt and BOJ need to work together on many issues; deflation is the main problem for the economy

- (JP) Japan Business Federation (Keidanren) chief Sakakibara met with China's Commerce Ministry, urging more transparent antitrust process - Nikkei

Asia movers

- China Unicom 762.HK +5.0%; Raised at Goldman Sachs

- Iluka Resources ILU.AU +4.8%; raised to buy from neutral at UBS

- Qube Holdings QUB.AU +4.6%; upgraded to outperform at Macquarie

- Warehouse Groupd WHS.NZ +1.4%: Reports FY16 adj net NZ$64.1M v NZ$57.1M y/y, Rev NZ$2.95B v NZ$2.78B y/y

- Gold miners trade lower on gold prices; Newcrest NCM.AU -2.8%, Evolution Mining EVN.AU -2.6%

- Wynn Macau -3.7%, MGM China -3.0% cut at Credit Suisse

- Dentsu 4324.JP -4.6%: Confirms issues with improper accounting in internet ads, apologizes to customers

- Charter Hall CHC.AU -6.6%; Halt lifted after Gandel Group block sale

- Whitehaven Coal WHC.AU -8.5%; Annual report, CEO pay hike