2018Mar

FC: ASIAN CLOSING REPORT : WEDNESDAY – 14TH – MARCH – 2018 March 14, 2018 at 05:44AM

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Asian cash equity markets traded in negative territory (NIKKEI -0.9 %, S&P/ASX -0.7 %, SHANGHAI COMPOSITE -0.4 %) following declines on Wall Street after the firing of US Secretary of State Tillerson. On the data front, Chinese industrial production rose 7.2% (f/c +6.2%) YTD y/y in February, while fixed assets excluding rural increased 7.9% (f/c +7.0%) YTD y/y. Meanwhile, Chinese retail sales gained 9.7% (f/c +9.8%) YTD y/y in February. In Japan, core machinery orders jumped 8.2% (f/c +5.2%) m/m and 2.9% (f/c -0.7%) y/y in January. We saw the release of the BoJ’s January meeting minutes which showed little surprises, they showed most members stated momentum towards hitting price goal was being maintained and shared the view the BoJ should pursue powerful monetary easing persistently. They showed one member stated the BoJ would need to consider adjusting rate levels if economic activity and prices continue to improve, while one member said it was undesirable to let market speculation heighten that the BoJ may adjust monetary easing slightly at an early stage. One member mentioned there was room to use fiscal policy to overcome deflation and one member said effects and side-effects of the BoJ’s ETF purchasing must be examined from every angle. The Yen was largely unchanged on the minutes. We also heard from Japanese PM Abe and Finance Minister Aso, who said they never instructed ministry officials to change documents related to discount land deal. In other news, the PBoC set the yuan mid-point at 6.3205 against the Dollar.

Key Headlines:

* Japan Core Machinery Orders Data (Jan)

M/M +8.2% versus +5.2% expected, previous -11.9%

Y/Y +2.9% versus -0.7% expected, previous -5.0%

* BoJ Meeting Minutes (Jan)

Most members stated momentum towards hitting price goal was being maintained.

Most members shared the view the BoJ should pursue powerful monetary easing persistently.

Some members said they must monitor positive impact and side-effects of policy including the effect on the financial system.

One member mentioned said they must pay attention to financial institutions’ lending attitudes amid low environment of interest rates.

One member stated the BoJ would need to consider adjusting rate levels if economic activity and prices continue to improve.

One member noted the BoJ should take additional easing steps given uncertainty on achieving price goal.

One member added it was undesirable to let market speculation heighten that the BoJ may adjust monetary easing slightly at an early stage.

One member stated there was room to use fiscal policy to overcome deflation.

One member said effects and side-effects of the BoJ’s ETF purchasing must be examined from every angle.

* BoJ Kuroda on Wednesday voiced confidence the central bank could engineer a smooth exit from its ultra-loose monetary policy, but said it was too early to debate specifics with inflation still distant from its target

* Japan PM Abe and Finance Minister Aso said they never instructed ministry officials to change documents related to discount land deal

Abe said it is clear from documents even before alteration that me and my wife were not involved in deal for land sale.

* The PBoC set the yuan mid-point at 6.3205 against the Dollar

The PBoC injected 30 Bln yuan via 7-day reverse repos

The PBoC injected 20 Bln yuan via 28-day reverse repos

* China Retail Sales YTD Y/Y (Feb) +9.7% versus +9.8% expected, previous +10.2%

* China Industrial Production YTD Y/Y (Feb) +7.2% versus +6.2% expected, previous +6.6%

* China Fixed Asset Ex. Rural YTD Y/Y (Feb) +7.9% versus +7.0% expected, previous +7.2%

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