Japan JGB Yields Rise After Move By BoJ

Sep 21 18, 07:13 GMT

General Trend:

Asian equities generally track advance in US stocks
Micron declines over 6% post earnings/guidance
“Quadruple witching” in focus
Trade uncertainty weighs on business sentiment in Japan (PMI data)
Japan CPI picks up in Aug
Longer dated JGB yields rise after BoJ trims daily purchases
Copper options begin trading in Shanghai
Japan Economy Min Motegi and USTR Lighthizer to hold trade talks on Sept 24th; Trump and Abe expected to meet on Sept 23rd
The US Fed’s FOMC is due to hold its policy meeting next week (Sept 25-26)

Headlines/Economic Data

Australia/New Zealand

ASX 200 opened +0.2%
(AU) S&P affirms Australia sovereign rating at AAA; raises outlook to Stable from Negative [Note: Now all of the 3 major rating agencies have Australia at AAA (outlook stable)]
(NZ) New Zealand Aug Net Migration: 5.0K v 4.7K prior
(NZ) New Zealand Aug Credit Card Spending M/M: +2.6% v -1.1% prior; Y/Y: +7.7% v 3.2% prior

China/Hong Kong

Shanghai Composite opened +0.2%, Hang Seng +0.9%
Hong Kong Exchanges [388.HK]: Said to have held meeting with banks to discuss M&A targets in the tech space (US financial press)
Health and Happiness [1112.HK]: Cancels previously planned exchange offer and new issuance
(CN) China PBoC set yuan reference rate: 6.8357 v 6.8530 prior
(CN) China PBoC Open Market Operation (OMO): Skips OMO v CNY70B injected in 7 and 14-day reverse repos prior: Net: CNY110B drain v CNY30B drain prior
(CN) China End-Aug Local Government Debt Outstanding (CNY): 17.7T v 17.2T m/m
(CN) Head of China National Energy Administration (NEA) Nur Bekri said to face probe – Xinhua
(CN) China said to require efforts to ensure gas supplies during the winter – Chinese Press
(CN) Over 840 lots of Shanghai Futures Exchange (SHFE) copper put and call options said to have traded minutes after being launched – financial press
Hong Kong Dollar (HKD) rises over 0.2% amid equity gains, stronger Yuan (CNY) fix; HKD trades at 6-month high
(HK) Hong Kong Monetary Authority (HKMA): Sees domestic banks considering raising their rates if the US Fed raises rate – Local Media (comments ahead of next week’s Fed meeting)

Japan

Nikkei 225 opened +0.7%
(JP) JAPAN AUG NATIONAL CPI Y/Y: 1.3% V 1.1%E; CPI EX FRESH FOOD (CORE): 0.9% V 0.9%E (highest since March)
(JP) JAPAN SEPT PRELIM MANUFACTURING PMI: 52.9 V 52.5 PRIOR (3-month high)
(JP) BoJ announcement related to daily bond buying operation: Trims offer to buy over 25-yr JGBs to ¥50B from ¥60B prior
(JP) Japan 30-yr yield rises after BoJ trims daily purchases of over 25-year JGBs, hits highest since Oct 2017; 40-yr JGB yield trades above 1.01% (highest since Jan)
(JP) Japan Econ Min Motegi: To hold 2nd round of bilateral trade talks with the USTR Lighthizer on Sept 24th in New York; stance regarding opening up Japan’s agricultural market is unchanged
(JP) Japan Chief Cabinet Sec Suga: PM Abe and Trump to hold summit on Sept 26th; the two officials to meet for dinner on Sept 23rd
(JP) Japan Fin Min Aso: Want to create conditions so sales tax can go up, need to make sure we can raise sales tax in 2019 as scheduled; May meet US Vice President Pence for economic dialogue (timing uncertain)
(JP) Japan Investors Weekly Net Buying of Foreign Bonds: +¥2.31T v +¥297.6B prior; Foreign Buying of Japan Stocks: -¥1.48T v -¥1.1T prior
(JP) Japan Chief Cabinet Suga and Fin Min Aso to retain positions in Abe cabinet reshuffle in October – Japan press
(JP) Cabinet members Kono, Motegi and Seko are expected to remain in Japan PM Abe’s cabinet – Japanese Press
(CN) China announces meeting with Japan on 3rd country cooperation on Tuesday, Sept 25th

Korea

Kospi opened +0.4%
Samsung Electronics: Reportedly looking at cutting memory chip growth next year to keep supply tight (press)
(KR) South Korea Sept 1-20 Trade Balance: $6.4B – Customs Agency
(KR) South Korea Aug PPI Y/Y: 3.0% v 3.0% prior
(KR) South Korea President Moon’s approval rating rises to 61% v 50% prior – Gallup Poll
(KR) South Korea Fin Min: FX, bond and equity markets are relatively stable

Other

Largan Precision [3008.TW]: Said to note demand from customers has weakened (Taiwanese press)
(TH) Thailand Aug Customs Trade Balance ($): -0.59B v +1.2Be; Imports Y/Y: 22.8% v 11.1%e
(VN) Vietnam President Tran Dai Quang said to have died, ‘serious illness’ cited (financial press)

North America

US equities ended higher: Dow +1%, S&P500 +0.8%, Nasdaq +1%, Russell 2000 +1%
McDonald’s [MCD]: Raises Quarterly Cash Dividend By 15% to $1.16/share (implied yield ~2.9%); affirms long-term annual system wide sales growth 3-5%, EPS growth in the high-single digits

Europe

(UK) Prime Min May: we had a productive summit; EU’s Tusk confirmed commitment to reach a deal; EU has provided no counter-proposal – post Salzburg meeting comments
(UK) Former Brexit Min Davis: PM May’s Brexit proposal is opposed by 40 MPs in her party – press
(EU) ECB’s Praet (Belgium, chief economist): Euro area economy continues to expand at a rate that is above potential

Levels as of 01:30ET

Nikkei 225, +1.1%, ASX 200 +0.3%, Hang Seng +1.3%; Shanghai Composite +1.7%; Kospi +0.5%
Equity Futures: S&P500 +0.1%; Nasdaq100 +0.2%, Dax +0.1%; FTSE100 flat
EUR 1.1787-1.1772 ; JPY 112.78-112.42 ; AUD 0.7292-0.7280 ;NZD 0.6695-0.6680
Dec Gold +0.2% at $1,214/oz; Oct Crude Oil -0.1% at $70.28/brl; Dec Copper +0.3% at $2.774/lb