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Market Update – Asian Session: Aso Says No Intervention Needed On Yen At Current Levels

Headlines/Economic Data

General Trend: Asian equities generally track US gains amid holidays in China, Taiwan, South Korea and Vietnam

Hang Seng gains 1.8% in shortened session

Banks in Japan outperform after gains in S&P500 Financials sector and rise in Treasury yields

With the Shanghai markets closed, China equity futures gain in Singapore

Nasdaq and S&P500 Futures rise

US dollar (USD) trades broadly weaker in Asia, in the aftermath of the US inflation and retail sales data

USD/JPY declines: Japan Fin Min Aso said Yen strength is not abrupt enough to intervene

Japan Dec Core Machinery Orders see largest m/m decline since May 2014 (follows recent weaker than expected prelim Q4 GDP)

New Zealand sells 2025 bonds at higher yield and lower bid to cover

In Jan, Australia adds jobs for a record 16th straight month, but full-time employment declines

Indonesia reports second straight monthly trade deficit

Australia’s largest gold miner Newcrest reports declines in H1 profits and revenues amid impact of seismic event at Cadia operations and decline in gold/copper sales volumes.

US 10-year Treasury yield extends gains in Asian trading, hits 4-year high


Nikkei 225 opened +1.1%; closed +1.5%

TOPIX Electronic Devices Index +1.9%, Securities +1.8%, Iron &Steel +1.5%, Real Estate +1%

Financials track outperformance seen during US session, Japanese mega banks gain more than 1%

Japan Display [6740.JP]: Declines over 4% after 9M net loss widened

(JP) JAPAN DEC CORE MACHINE ORDERS M/M: -11.9% V -2.0%E; Y/Y: -5.0% (largest fall since June 2017) V +1.8%E

(JP) Japan Fin Min Aso: Yen (JPY) strength NOT strong enough to require intervention: No comment on yen level – parliament

(JP) Japan Govt to urge companies to adopt a more transparent decision-making process through measures such as allocating at least one-third of board seats to outsiders – Nikkei

(JP) Japan Ruling Coalition Partner Yamaguchi: No word from PM Abe on BOJ Gvo nominee

(JP) Japan MoF sells ¥4.4T in 3-month bonds; avg yield -0.1607%

(JP) JAPAN DEC FINAL INDUSTRIAL PRODUCTION M/M: 2.9% V 2.7% PRELIM; Y/Y: 4.4% V 4.2% PRELIM, Capacity Utilization m/m: 2.8% v 0.0% prior


Kospi closed

(KR) South Korea President Moon coming under some criticism for slow regulatory reform, in light of his repeated pledges to push for drastic deregulation – Korean press

Lotte, LOTZ.KR Chairman Shin Dong-bin jail term will reigniting a succession battlebetween Shin and his older brother, Shin Dong-joo – Korean press

China/Hong Kong

Hang Seng opened +1.5%, Shanghai Composite closed for holiday

Hang Seng Materials Index +3.3%, Info Tech +2.9%, Energy +2.7%, Financials +2.3%,Property/Construction +1.7%

(CN) China cuts manufacturer subsidies for many electric cars and plug-in hybrids by ~30%, with the centralgovt planning to re-evaluate this aid again around mid-year – press

(CN) China Ambassador to US Tiankai: It’s dangerous to advocate for confrontation against China – financial press

Australia/New Zealand

ASX 200 opened +0.6%; closed %

ASX 200 Materials Index +2.1%, Energy +1.9%, Utilities+1.2%, Telecom +1.2%, Financials +0.7%; REIT -0.1%

Origin Energy [ORG.AU] rises over 6% after raising guidance

Telstra [TLS.AU] gains over 1% after reporting in line H1 earnings

(NZ) New Zealand Rev Min:To extend test on residential sales (bright line test) to 5 years

(AU) Australia Jan Consumer Inflation Expectation: 3.6% v 3.7% prior


(AU) Australia Jan RBA Govt FX Transactions (A$): -634M v -1.36B prior

(NZ) New Zealand sells NZ$200M in 2.75% 2025 bonds; avg yield 2.7719%; bid to cover 2.78x

FCG.NZ Raises 12-month forecast auction volumes by 2.0K MT

(NZ) Fitch affirms New Zealand Sovereign Rating at AA; Outlook Stable

Looking ahead: RBA Gov Lowe expected to speak on Friday’s session (follows his remarks on Feb 8th)

Other Asia

(SG) Singapore Jan Non-OilDomestic Exports M/M: -0.3% v 4.2%e; Y/Y: +13.0% v 8.9%e; Electronic ExportsY/Y: -3.9% v -5.3% prior

North America

US equity markets ended higher: Dow +1%, S&P500 +1.3%, Nasdaq +1.9%, Russell 2000+1.8%

S&P500 Financials +2.4%, Technology +1.8%

(US) Treasury Sec Mnuchin: reiterates he expects wage growth in the US this year

(US) Pres Trump reportedly supports a 25-cent gas tax hike to pay for infrastructure – Axios

(US) DOE CRUDE: +1.8M V +3ME


(DE) Bundesbank study says about 90% of euro (EUR) bank notes issued in Germany are never used for payments, but instead hoarded – FT

(DE) German Chancellor Merkel: will make sure Germany maintains a balanced budget; CDU Party remains opposed to debt mutualization in the Euro Zone

(GR) Greece Deputy PM Dragasakis: Greece wants a closer relationship with China, it is also keen to build stronger ties with Japan, India and other Asian countries – press

Levels as of 01:00ET

Nikkei225 +1.5%, Hang Seng +1.8%; Shanghai Composite closed; ASX200 +1.2%, Kospi closed

Equity Futures: S&P500 +0.4%; Nasdaq100 +0.5%,Dax +0.4%; FTSE100 +0.2%

EUR 1.2473-1.2448; JPY107.01-106.30; AUD 0.7946-0.7905;NZD 0.7395-0.7363

Apr Gold -0.1% at $1,357/oz; Mar Crude Oil +1.3% at $61.41/brl; Mar Copper +0.3% at $3.24/lb

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