2018Feb

FC: ASIAN CLOSING REPORT: FRIDAY – 2ND – MARCH – 2018 March 02, 2018 at 05:59AM

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Asian stocks traded firmly in negative territory (NIKKEI -2.7%, S&P/ASX -0.7%, SHANGHAI COMPOSITE -0.6%) following sharp declines stateside after US President Trump’s tariff announcements. On the data front, Japan’s jobless rate dropped to 2.4% (f/c +2.8%) in January, its lowest since April 1993, while the job-to-applicant ratio held at 1.59 (f/c +1.60). Meanwhile, Tokyo CPI data rose 1.4% y/y, as expected, while excluding fresh food rose 0.9% (f/c +0.8%) y/y and excluding fresh food & energy rose 0.5%, as expected, in January. Also of note, Japan’s monetary base jumped 9.4% y/y in February. The Japanese Yen was largely unchanged on the release of the data before continuing to strengthen as the session wore on trade war concerns, with Usd/Jpy falling below the 106.00 handle for the first time in two weeks. Following the aforementioned Trump steel tariff announcement, Japan Trade Minister Seko said they will work to confirm details of tariffs from the US, adding included in the details is which countries will be targeted. He said Japan exports of steel and other products are not a threat to national security in the US. Meanwhile, Japan Economy Minister Motegi said they will monitor closely the impact of US import curbs on Japan and global economies, adding he has not heard from the US with regard to TPP including any requests. Staying with trade, the White House said talks with Chinese Economic Adviser Liu He were constructive and frank, adding the US underscored importance of achieving balance and reciprocity in the economic relationship with China. Elsewhere, Japanese PM Abe said the government and the BoJ must work together closely and deploy all means available to defeat deflation, while BoJ Governor Kuroda said the Bank must continue powerful monetary easing as inflation is still distant from the BoJ’s goal.

 

Key Headlines:

*  Japan Unemployment Data (Jan):

  • Jobless Rate +2.4% versus +2.8% expected, previous +2.8% – Lowest level since April 1993
  • Job-to-Applicant Ratio +1.59 versus +1.60 expected, previous +1.59

*  Japan Tokyo CPI Data (Jan)

  • Y/Y +1.4% versus +1.4% expected, previous +1.3%
  • Ex. Fresh Food Y/Y +0.9% versus +0.8% expected, previous +0.7%
  • Ex Food, Energy Y/Y +0.5% versus +0.5% expected, previous +0.4%

*  Japan Monetary Base Y/Y (Feb) +9.4%, previous +9.7%

*  Comments from the White House:

  • Talks with Chinese Economic Adviser Liu He were constructive and frank.
  • US underscored importance of achieving balance and reciprocity in the economic relationship with China.
  • Discussed ways to ensure reciprocal and fair trade with China.

*  Japan Trade Minister Seko said they will work to confirm details of tariffs from the US, adding included in the details is which countries will be targeted. He said Japan exports of steel and other products are not a threat to national security in the US.

*  Japan Economy Minister Motegi said they will monitor closely the impact of US import curbs on Japan and global economies, adding he has not heard from the US with regard to TPP including any requests.

*  The PBoC set the yuan mid-point at 6.3334 against the Dollar:

  • The PBoC injected 40 Bln yuan via 7-day reverse repos
  • The PBoC injected 30 Bln yuan via 28-day reverse repos
  • The PBoC injected 20 Bln yuan via 63-day reverse repos
  • The PBoC injected a net 120 Bln yuan for the week via OMOs

*  Japan PM Abe said the government and the BoJ must work together closely and deploy all means available to defeat deflation

*  BoJ Governor Kuroda said the Bank must continue powerful monetary easing as inflation is still distant from the BoJ’s goal. He also said they will consider an exit from the current policy stance around FY2019

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