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Japan JGB Yields Rise After Move By BoJ

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)


  • 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


  • 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


  • 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


  • (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
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