Thu, Feb 25, 2021 @ 10:55 GMT
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Asia Market Update: USD/JPY Tests 16-Month Low

Headlines/Economic Data

General Trend: Asian Markets trade generally lower following sharp declines on Friday

  • Japan steel companies continue to be weighed down by trade concerns
  • Meanwhile, South Korea steelmakers gain on speculation of new trade agreement with US
  • Nikkei pares more than 1% loss
  • US equity futures trade higher; US financial press reports US and China are aiming to ease trade dispute
  • US said to send letter to China about how to reduce trade surplus
  • New Zealand adds employment to the RBNZ’s mandate
  • Shanghai Yuan-denominated oil futures rise over 6% in first day of trading
  • China traded Steel and Iron Ore prices extend declines

Japan

  • Nikkei 225 opened -0.9%; closed +0.7%
  • TOPIX Iron & Steel Index -1.3%
  • Ricoh [7752.JP] declines over 4% after disclosing impairment charge
  • (JP) Japan PM Abe Cabinet approval declines to 42%, down 14 pct points from late Feb; comes amid Moritomo land scandal – Nikkei
  • (JP) Former head of an education institute confirms PM Abe wife was involved in land sale at center of scandal – Kyodo citing opposition lawmakers who interviewed him at detention center
  • (JP) Japan Steel Federation: JPY currency (Yen) appreciation to 104-105 area is a concern

Korea

  • Kospi opened -0.1%
  • (KR) South Korea Trade Min: South Korea and the United States have reached an agreement “in principle” on renegotiation of their free trade agreement – Korean press

China/Hong Kong

  • Hang Seng opened -0.1%, Shanghai Composite -1.1%
  • Hang Seng Financials Index -0.9%, Materials -0.7%
  • Shanghai Composite Property sub-index declines over 1%
  • Footwear company Yue Yuen declines over 6% after reporting drop in FY17 profits
  • (CN) China to launch yuan denominated oil futures contract, the “petroyuan”, effective today after long awaited approval from China State Council
  • (CN) China names Guo Shuqing (current vice Chairman of newly combined banking/insurance regulator) as party secretary of the PBoC – financial press
  • (CN) New PBoC Gov Yi Gang reiterated China will steadily reform and further open its financial sector, while putting equal emphasis on risk prevention – China Development Forum in Beijing (update)
  • (CN) China researcher says RRR should be cut – Chinese Press
  • (US) Treasury Se Mnuchin: Trump administration is pressing ahead with tariffs, but remains hopeful on reaching trade deal with China – Fox
  • (US) Trump Administration said to send letter from Treasury Sec and US Trade Rep to China’s Liu He seeking reduction of China’s tariffs on US autos – US financial press
  • (CN) China’s former Vice Commerce Min Wei Jianguo says China may seek to add tariffs on US airplanes and computer chips – Chinese
  • USD/CNY (CN) China PBoC sets yuan reference rate at 6.3193 v 6.3272 prior
  • (CN) PBoC Open Market Operation (OMO): Skips OMO v skips prior; Net drains CNY70B v CNY90B prior (2nd consecutive skip)
  • (CN) PBoC auctions 3-month Finance Ministry (MOF) deposits at 4.62%
  • (CN) China Minister: ‘Made in China 2025’ policies apply to foreign companies; reiterates to further open manufacturing sector to foreign capital
  • (CN) China targeting US soybean exports would be seen as a serious escalation in tensions – FT
  • (CN) China Ambassador to US Tiankai: China is looking at all options in response to US tariffs including reducing purchase of treasuries – financial press
  • (HK) HK$ overnight HIBOR +10bps, highest level in March; 12-month +4bps to 1.90193% (highest level since 2008)

Australia/New Zealand

  • ASX 200 opened -0.1%; closed -0.5%
  • ASX 200 Financials Index -0.8%, Telecom -0.7%
  • Gold miners in Australia outperform after recent gain in gold prices
  • (NZ) RBNZ incoming Gov Orr and Fin Min Robertson: Issue new RBNZ policy targets; creates monetary policy committee; affirms to retain focus on 2% midpoint of inflation target range and full employment; Adds employment to the RBNZ’s mandate
  • (NZ) NEW ZEALAND FEB TRADE BALANCE (NZ$): +217M V -100ME; 12-MONTH YTD: -3.0B V -3.2BE; Exports: 4.5B v 4.6Be, Imports: 4.2B v 4.6Be

North America

  • (US) Trump Administration said to send letter from Treasury Sec and US Trade Rep to China President Xi’s top economic advisor Liu He seeking reduction of China’s tariffs on US autos – US financial press
  • (US) Reportedly San Francisco Fed Pres John Williams is the leading candidate to become next president of the New York Fed – press
  • (US) Gun manufacturer Remington Outdoor has filed for bankruptcy
  • UBER.IPO Sells southeast Asia operations to Grab in exchange for 27.5% stake in Grab; Uber CEO to have seat on board

Europe

  • (ES) S&P raises Spain sovereign debt rating one notch to A- from BBB+; outlook Positive (from Friday, March 23rd)
  • (ES) On Sunday, former Catalonia leader Carles Puigdemont was detained by police officials in Germany – US financial press
  • (IT) Italy’s 5-star and League parties said to reach agreement on election of parliamentary speakers – financial press

Levels as of 01:00ET

  • Hang Seng -0.5%; Shanghai Composite -1.7%; Kospi +0.5%
  • Equity Futures: S&P500 +0.8%; Nasdaq100 +1.0%, Dax +1.0%; FTSE100 +0.7%
  • EUR 1.2382-1.2343; JPY 105.06-104.57; AUD 0.7731-0.7696;NZD 0.7277-0.7231
  • Apr Gold -0.2% at $1,346/oz; May Crude Oil -0.5% at $65.55/brl; May Copper -0.5% at $2.96/lb
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