Today in Asian markets, the performance was mixed, characterized by losses in Japan due to the strengthening yen, which offset gains seen in major technology firms. The Nikkei 225 index declined by 0.6%, influenced by the Japanese currency’s surge to its strongest level against the dollar in a month. Meanwhile, China’s CSI 300 benchmark initially saw gains but later fell by 0.3%, despite China reporting a faster-than-expected rise in exports, solidifying its position as the world’s second-largest economy.
Rajat Agarwal, Asia equity strategist at Societe Generale, noted, “Chinese equities have stabilized, but the NPC (National People’s Congress) did not alter the trajectory of the overall market, failing to instill more confidence in investors.” He added, “Earnings are stabilizing, albeit at lower levels, which isn’t exciting investors about the market.”
The yen strengthened to below 150 per dollar, partly attributed to the swiftest pace of wage growth since June. Consequently, Japan’s two-year government note yield climbed to its highest level since 2011, fueled by growing expectations that the central bank might end its negative interest rate policy as soon as this month.
Among the few bright spots were some tech giants. Chinese e-commerce giant JD.Com surged nearly 10% in Hong Kong following the announcement of a $3 billion share buyback program and reporting sales growth that exceeded consensus estimates. Similarly, Taiwan Semiconductor Manufacturing Co. reached a record high after Nvidia Corp. received an upgrade from Moody’s Ratings.
In the United States, futures edged lower following the S&P 500 Index’s 0.5% rise, reclaiming the 5,100 mark, and the Nasdaq 100’s 0.7% advance on the previous day.
The dollar index saw a marginal decline after a drop in US yields. Meanwhile, the 10-year benchmark yield remained steady in Asia after decreasing by five basis points to 4.1% in the prior session.
The weakness observed in certain parts of the Asian equities market resurfaced after Federal Reserve Chair Jerome Powell reiterated to lawmakers the central bank’s cautious approach towards interest rate cuts until they are convinced of winning the battle against inflation.
Elsewhere, WuXi AppTec Co. experienced a decline after a US Senate committee passed a bill that could potentially exclude Chinese biotech firms and others from federal contracts.
Bitcoin made a recovery, bouncing back above $66,000 after experiencing a high earlier in the week. Gold stabilized after its recent record-setting performance, as gains in both the cryptocurrency and precious metal presented mixed signals to market participants.
In the oil market, prices remained stable after a rise on the previous day, with West Texas Intermediate increasing by 1.3%. Further tensions in the Middle East emerged following the first confirmed deaths of commercial crew members as Houthi militants initiated attacks in the region.
Key Events This Week:
- China trade data and forex reserves to be released on Thursday
- European Central Bank’s rate decision scheduled for Thursday
- US initial jobless claims and trade data to be released on Thursday
- President Joe Biden delivers the State of the Union address on Thursday
- Fed Chair Jerome Powell testifies before the Senate Banking Committee on Thursday
- Cleveland Fed President Loretta Mester speaks on Thursday
- Eurozone GDP data to be released on Friday
- US nonfarm payrolls and unemployment data to be released on Friday
- New York Fed President John Williams and ECB Governing Council member Robert Holzmann scheduled to speak on Friday
Market Movements:
Stocks:
- S&P 500 futures fell by 0.3% as of 11:19 a.m. Tokyo time
- Nikkei 225 futures (OSE) declined by 0.6%
- Japan’s Topix fell by 0.1%
- Australia’s S&P/ASX 200 remained relatively unchanged
- Hong Kong’s Hang Seng remained relatively unchanged
- The Shanghai Composite rose by 0.5%
- Euro Stoxx 50 futures fell by 0.2%
Currencies:
- The Bloomberg Dollar Spot Index experienced minimal change
- The euro remained relatively unchanged at $1.0898
- The Japanese yen strengthened by 0.5% to 148.70 per dollar
- The offshore yuan remained relatively unchanged at 7.2097 per dollar
Cryptocurrencies:
- Bitcoin fell by 0.3% to $66,249.9
- Ether fell by 1.1% to $3,805.99
Bonds:
- The yield on 10-year Treasuries increased by two basis points to 4.12%
- Australia’s 10-year yield remained relatively unchanged at 4.01%
Commodities:
- West Texas Intermediate crude fell by 0.1% to $79.03 a barrel
- Spot gold remained relatively unchanged
