Asian Market Update

Asian markets sell off on renewed fiscal cliff concerns; Japan government maintains economic assessment

Economic Data

(JP) JAPAN CABINET GOVT DEC MONTHLY REPORT: MAINTAINS ECONOMIC ASSESSMENT (follows 4 prior monthly cuts in view)

(NZ) NEW ZEALAND NOV CREDIT CARD SPENDING M/M: 0.4% V 0.3% PRIOR; Y/Y: +3.9% V -0.9% PRIOR

(NZ) NEW ZEALAND NOV NET MIGRATION: 590 V 340 PRIOR

(JP) Japan Nov Supermarket Sales y/y: -2.6% v -4.0% prior

(KR) South Korea 2012 household debt to disposable income avg at 152.3% v 158.5% y/y

(VN) Vietnam 2013 exports y/y: +18.3% at $114.6B, imports y/y: +7.1% at $114.3B - financial press

Markets Snapshot (as of 05:30 GMT)

Nikkei225 -0.8%

S&P/ASX -0.2%

Kospi -0.9%

Shanghai Composite -0.4%

Hang Seng -0.7%

Mar S&P500 -0.6% at 1,443

Feb gold -0.2% at $1,643/oz

Jan Crude Oil -1.3% at $89.15/brl

Notes/Observations

Asian markets quickly retreated from initial gains as uncertainty enveloped investors on renewed concerns related to the US 'fiscal cliff'. The expected vote on House Speaker Boehner's 'plan B' in the House of Representatives was cut short as the House abruptly called for recess. It was later reported, through a Republican aide, that the fiscal plan lacked enough support to pass. The House may reconvene after the Christmas holidays, as early as the 27th of Dec, with a new fiscal plan yet to be decided on.

March emini S&P500 plunged to 1,391 before retreating back to 1,418 heading into the European session.

The Japanese government maintained its economic assessment for the first time in five months. The last report by the government under the leadership of Prime Minister Noda expected the Bank of Japan to continue powerful easing until deflation was contained. In addition, it assessed that the domestic economy is weakening amid the global economic downturn, but also noted signs of bottoming out in some key indicators such as production and consumption. Five of the 14 categories were revised lower, including public investment, corporate earnings and business confidence. Also, following up on comments made by the Governor Shirakawa on debating inflation at the next policy meeting, the Japanese press later reported that the BoJ was likely to adopt an inflation target next month.

Currencies/Fixed Income/Commodities

IMF reports gold holdings for various countries for Nov; Brazil increased gold holdings by 14.7 tons to 67.2 tons

Speakers/Political/In the Papers

(JP) China vessels were reported in disputed island territories for the first time since the Japan general elections - financial press

(JP) Bank of Japan (BoJ) Gov Shirakawa: Foreign investor risk aversion is a factor behind weakness in the yen

(JP) Bank of Japan (BoJ): Foreign ownership of Japanese debt has risen to a record high of 9.1% - financial press

(JP) Local governments in Japan may have to revise their FY13 budgets as LDP looks to alter spending frameworks - Nikkei News

(KR) South Korea reported the Dec 1st-20th trade balance: -$387M; exports -7.4% y/y, imports -4.6% y/y - financial press

(CN) China could announce new housing curbs - financial press

(CN) China Qualified Foreign Institutional Investors (QFII) increased stock purchases from Aug - financial press

Equities

Mazda 7261.JP: Reports Nov global production -10.3% y/y to 96.8K units

Mitsubishi Electric 6503.JP: May lower FY profit guidance by 50% - Japanese press

Kawasaki Heavy 7012.JP: To reduce shipbuilding business in Japan - Japanese press

Tohoku Electric 9506.JP: Quick restart of Aomori nuclear facility expected to be ruled out - Japanese press

Samsung Electronics 005930.KR: EU commission to file complaint for violating anti-trust rules - financial press

Qantas Airways QAN.AU: Reports Nov passenger figures +6.4% y/y

SIA.SG: New Zealand regulator imposed NZ$4.1M fine related to price fixing - financial press

Cathay Pacific 293.HK: CEO said North American cargo has picked up - financial press

VALE: Expects to write down the value of nickel and aluminum assets by $4.2B after a review of the assets - filing

CTAS: Reports Q2 $0.63 v $0.63e, R$1.06B v $1.06Be; +0.6% afterhours

MU: Reports Q1 -$0.27 v -$0.19e, R$1.83B v $2.01Be; -2.7% afterhours

NKE: Reports Q2 $1.14 v $1.00e, R$5.96B v $6.02Be; +4.8% afterhours

RHT: Reports Q3 $0.29 v $0.29e, R$344M v $338Me; +7.0% afterhours

RIMM: Reports Q3 -$0.22 v -$0.35e, R$2.73B v $2.65Be; -9.0% afterhours

TIBX: Reports Q4 $0.42 adj v $0.39e, R$296.5M v $298Me; +3.9% afterhours

SNDK: Raises stock repurchase program by $750M (7% of market cap) to a total of $1.25B