Asian Market Update: Japan Nov inflation at 5-year highs; China market outperforms the region Fri, 27 Dec 2013 1:04 AM EST
***Observations/Insights*** - The Asian bourses were mainly trading in positive territory following another solid performance out of the US markets and overall upbeat data out of Asia. The Nikkei225 started the session higher while the yen tumbled against the USD and euro. A strong USD tested the 105 yen barrier, the highest since October 2008. Despite the strong USD and overall positive Japan economic data, the Nikkei225 reversed earlier gains on profit taking. - Japan inflation data for November rose for the sixth consecutive month to 1.2% beating expectations and brought Japan closer to the 2% target set by the BOJ. - Japan Nov retail sales came in at the fastest pace since Apr 2012 at 4.0% on the year comfortably beating expectations, while preliminary industrial production data came in at 0.1% less than the 0.4% expected. The government maintained its assessment of industrial output adding that it continues to show upward movement. - China reported industrial profits increased 13.2% on the year, a half percentage point slower than the pace in the prior reading. China stocks rose, along with the Hong Kong market, as low valuations attracted the interest of investors.
***Economic Data*** - (JP) JAPAN NOV PRELIM INDUSTRIAL PRODUCTION M/M: 0.1% V 0.4%E; Y/Y: 5.0% V 5.4%E - (JP) JAPAN NOV NATIONAL CPI Y/Y: 1.5% V 1.5%E; CPI EX FRESH FOOD Y/Y: 1.2% V 1.1%E (largest increase in 5 years; 6th consecutive increase) - (JP) JAPAN DEC TOKYO CPI Y/Y: 0.9% V 0.9%E; CPI EX FRESH FOOD Y/Y: 0.7% V 0.7%E - (JP) JAPAN DEC MARKIT/JMMA MANUFACTURING PMI: 55.2 V 55.1 PRIOR (10th straight month of expansion; highest reading since July 2006) - (JP) JAPAN NOV RETAIL TRADE M/M: 1.9% V 1.0%E; Y/Y: 4.0% V 3.0%E; LARGE RETAILERS' SALES Y/Y: 0.6% V 0.7%E - (JP) JAPAN NOV JOBLESS RATE: 4.0% V 3.9%E; JOB-TO-APPLICANT RATIO: 1.00 V 0.99E (highest reading since Oct 2007) - (JP) JAPAN NOV VEHICLE PRODUCTION Y/Y: 10.2% V 10.1% PRIOR - (JP) Japan investors sold net ¥680.6B in foreign bonds last week vs bought net ¥110.5B in prior week; Foreign Investors bought net ¥838.3B in Japan stocks v bought net ¥619.3B in prior week - (JP) JAPAN NOV OVERALL HOUSEHOLD SPENDING: 0.2% V 1.8%E (3rd consecutive increase) - (CN) CHINA NOV INDUSTRIAL PROFITS Y/Y: 9.7% V 15.1% PRIOR; YTD: 13.2% V 13.7% PRIOR - (JP) JAPAN NOV LABOR CASH EARNINGS Y/Y: 0.5% V 0.3%E - (KR) SOUTH KOREA JAN MANUFACTURING BUSINESS SURVEY: 79 V 78 PRIOR; NON-MANUFACTURING SURVEY: 70 V 72 PRIOR - (PH) PHILIPPINES OCT TRADE BALANCE: +$202M V -$700ME - (TH) THAILAND NOV MANUFATURING PRODUCTION INDEX ISIC Y/Y: -10.6% V -11.4%E - (US) Weekly Fed Balance Sheet Assets Week ending Dec 25th: $3.985T v $3.965T prior; M1: +$5.7B v +$3.7B prior; M2: +$5B v +$17.5B prior
***Fixed Income/Commodities/Currencies*** - USD/CNY: (CN) PBoC sets yuan mid-point at 6.1050 v 6.1156 prior setting (record high setting for yuan) - (JP) Bank of Japan (BOJ) offers to purchase ¥400B in 5-10yr JGB and ¥200B in JGB with maturity over 10-yr
***Speakers/Political/In the Papers*** - (JP) Japan civil service fund reduces JGB allocation - financial press - (JP) Japan steelmakers awarded 6% price cut for coking coal (lowest since Q3 2010) - Japanese press
- (CN) China Ministry of Commerce (MOFCOM) reiterates China 2013 retail sales to rise 13% y/y; sees industrial production up about 9.8% - Chinese press - (CN) China Human Resources: China urban registered jobless rate approx 4.1% by end of 2013 - Chinese press - (CN) China central SOEs Jan-Nov profit CNY1.2T, +7.5% y/y, Rev CNY21.8T, +9.5% y/y - People's Daily - (CN) China national audit office head: to monitor existing government debt risks and new government debt raising - Chinese press - (CN) China sets asset requirements for key shareholders of public funds - Chinese press
- (KR) South Korea releases 2014 policy report: Raises 2013 GDP forecast to 2.8% from 2.7% prior; Cuts 2014 GDP forecast to 3.9% from 4.0% prior - (KR) South Korea reportedly may allow banks to tap up to $10B from fx reserves - financial press - (IN) India PM Singh said to be not interested in a third term - financial press
***Equities*** Market Snapshot (as of 04:30 GMT): - Nikkei225 -0.6%, S&P/ASX -0.1%, Kospi +0.1%, Shanghai Composite +0.9%, Hang Seng +0.3%, Mar S&P500 -0.1% at 1,835, Feb gold -0.1% at $1211, Feb crude oil -0.1% at $99.47/brl
US markets: - TXT: To acquire Beechcraft for $1.4B in cash; +2.2% afterhours
Notable movers by sector: - Materials: Bluescope Steel BSL.AU +1.8% (expansion plans); Kobe Steel; 5406.JP +1.7% (price adjustments) - Healthcare: Takeda Pharmaceutical 4502.JP -5.0% (terminates development for fasiglifam); Beijing Tiantan Biological Products 600161.CN -3.6% (Hepatitis B Vaccine issue) - Technology: Telling Telecommunications 000829.CN +4.7% (awarded license); China Spacesat Co 600118.CN +2.0% (forecasted satellite coverage) - Industrials: China International Marine Containers Group 2039.HK +14.0% (H-share issuance); Dongfeng Motor: 489.HK -3.5% (bond sale delay); China CSSC Holdings 600150.CN +6.6%