Japanese equities and equity futures decline amid various holiday-related closures in Asia
|Asia Market Update: Japanese equities and equity futures decline amid various holiday-related closures in Asia; Offshore yuan drops over 0.5%; Concerns about coronavirus continue to weigh on markets, China has extended Lunar New Year holiday by 3 days
General Trend:
- China has confirmed 2,744 cases of the coronavirus as of the end of Jan 26th (Sunday) and 80 deaths [vs 830 cases and 25 deaths as of Jan 23rd]; Said the ability of the virus to spread is getting stronger, not clear about the risk of the virus mutating into a more deadly form; Xinhua noted on Sunday that 30 local governments in China had activated level 1 emergency responses to try to contain the coronavirus outbreak.
- China has extended Lunar new year holiday to Feb 2nd to try and stem impact from coronavirus, China futures on the SGX continue to decline in the session
- Virus continues to grow more contagious as cases continue to pop up around the globe, China is testing the use of AbbVie HIV drugs as part of possible treatment plan
- Trade-sensitive Marine/Transportation index declines over 2.5% in Japan, tourism-related stocks also weighed down by coronavirus concerns
- Oil Futures decline over 3% amid concerns about possible impact of coronavirus on travel and economic growth. Copper drops over 1.5%
Headlines/Economic Data
Australia/New Zealand
-ASX 200 closed for holiday
- (AU) Australia energy regulator finds the planned A$1.5B project to run power cable connecting NSW with South Australia has less benefits than originally expected but enough to still make it worth while project – AFR
- SML.NZ Raises FY20 milk price forecast NZ$7.25 KGMS v NZ$7.00 prior, on the back of higher than expected commodity prices at the end of 2019, which we believe will hold in the medium term as supply and demand continue to be evenly matched
Japan
-Nikkei 225 opened -1.7%
- (JP) Japan FSA to require banks to hold additional capital for stock losses, the move is seen as an attempt to discourage the practice of cross-shareholdings - Japanese press
- 7201.JP Engineering chief to meet with Renault counterpart this week in Japan in order to revive R&D projects under its alliance - financial press
-6502.JP Unit that is subject of Toshiba accounting probe engineered fake deals worth over ¥40B ($365M) that inflated sales – Nikkei
- (JP) Japan Cabinet approval rating 48%, -2ppt w/w; Disapproval rating 45%, +4ppt w/w – Nikkei
- 9984.JP Former employee, Yutaka Araki, arrested for suspected of stealing information Feb of 2019 and spying for Russia - SCMP
- (JP) Japan PM Abe pick to replace outgoing BOJ official Harada (dissenter) could be announced Tuesday
-(JP) Bank of Japan Chief Economist Kamiyama: Watching the impact of the coronavirus on Japan's economy; virus will not derail global recovery is impact is similar to SARS
Korea
- Kospi closed for holiday
- 000660.KR Market watchers note they expect prices of LCD panels to rise in H1 2020 due to South Korea manufacturers cutting their supplies as they convert LCD factories to OLED production lines - Yonhap
China/Hong Kong
-Hang Seng was closed for holiday; Shanghai Composite closed for holiday
- Weekend coverage on virus can be found here: (CN) China National Health Commissioner Ma says appears that the coronavirus' ability to spread is getting stronger, virus is mutating and can be transmitted through human contact; total confirmed cases of infection in China is over 2,000 as of Sunday afternoon, with 56 that have died; extends Lunar new Year to Feb 2nd
- Monday coverage on virus can be found here: (CN) China has confirmed 2,744 cases of the coronavirus as of the end of Jan 26th (Sunday) and 80 deaths [vs 830 cases and 25 deaths as of Jan 23rd], China officials have extended the Lunar Year holiday to Feb 2nd from Jan 30th due to the impact of the virus
- (HK)Hong Kong Govt bans residents from Hubei province (where Wuhan is located) from visiting Hong Kong
- (HK) Macau Tourism Office: 2020 First Day of Lunar New Year Visitor Arrivals 55.1K, -34.6% y/y; 2020 Second Day of Lunar New Year Visitor Arrivals 57.8K, -59.0% y/y
- (CN) China Banking and Insurance Regulatory Commission (CBIRC) encourages banks to appropriately lower lending rate for sectors negatively impact by coronavirus
Other
- (SA) Saudi Energy Min Abdulaziz: With OPEC+ producers have the capability and flexibility needed to respond to any developments by taking necessary actions to support the oil market stability if needed
- (PH) Philippines Central Bank Gov Diokno: Inflation like we saw in 2018 will not reoccur in 2020 or 2021; there is room for rate and RRR cut this year
North America
- ABBV Confirms China testing HIV drug, Aluvia/Kaletra, as treatment for new coronavirus
- (US) President Trump: “Shifty Adam Schiff is a CORRUPT POLITICIAN, and probably a very sick man. He has not paid the price, yet, for what he has done to our Country!” – tweet
- (IQ) Injuries reported in rocket attack on US Embassy in Baghdad
- (IQ) Media speculation that jets flying over Baghdad may be part of US military response to rocket attacks on US embassy in Iraq earlier today - Al Jazeera
-(US) Former National Security Adviser Bolton is said to have noted that President Trump told him in Aug that Trump wanted to keep aid to Ukraine frozen; cites the draft from a yet to be released book about Bolton – US financial press
Europe
- (UK) Brexit Se Barclay: UK will layout more details about its objectives for a free trade agreement with EU in February
- (IT) Italy Regional Early Election Results: Centre Left clearly ahead of League in Emilia Romagna - local press
- CSGN.CH Switzerland watchdog (FINMA) is examining board oversight of the firm's CEO as part of spying investigation - financial press
Levels as of 12:15ET
- Hang Seng closed; Shanghai Composite closed; Kospi closed; Nikkei225 -2.0%; ASX 200 closed
- Equity Futures: S&P500 -1.0%; Nasdaq100 -1.4%, Dax -0.9%; FTSE100 +0.7%
- EUR 1.1037-1.1021; JPY 109.11-108.73; AUD 0.6820-0.6801; NZD 0.6597-0.6569
- Commodity Futures: Gold +0.5% at $1,579/oz; Crude Oil -2.5% at $52.84/brl; Copper -1.5% at $2.64/lb
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