BoJ adds “uncertainty’ to its pause – Focus on BoJ Gov Ueda presser

General trend

- The Bank of Japan voted unanimously to keep interest rates steady. BOJ noted a need for vigilance to the impact of financial, FX market moves on Japan's economy and prices. Also removed a paragraph from the previous July decision referring to the BOJ “continuing to raise the policy interest rate and adjust the degree of monetary accommodation.” Instead, the word ‘uncertainty’ has been introduced into the September Statement.

- Japan National CPI for August came in as expected across the board, with all figures reaching the BOJ’s target range.

- The Nikkei was unmoved by the BOJ and again led Asia today, +2% on top of yesterday’s +2.2%. JP yields also non-responsive. Japan’s weekly equity flows last week saw foreigners sell a record-equal amount of Japanese equities (most since week ended Sept 28th, 2023)

- Other than the Yen ranging +/- 1.0% during the day, currencies were quiet in narrow ranges.

- China State-owned banks seen buying US dollars onshore to prevent Yuan from appreciating too fast, as the PBOC set today’s Yuan reference rate at the strongest since May 29th, 2023. Prior to a brief spell in August, the last intensive period of buying USD by Chinese state-owned banks was late 2020 through early 2021.

- China also said it would consider removing 'major' home buying curbs as its property market continues to unwind. China PBOC left its LPR rates unchanged.

- Taiwan hiked its RRR rate by 25bps saying it would absorb $NT125B, while leaving interest rates steady.

- Aussie 10-yr yields +13bps overnight to 4.00%, with Aussie dollar retaking and holding the 68c handle.

- US equity FUTs -0.1% to -0.2% during the Asia session.

Looking ahead (Asian time zone)

- Friday Sept 20th; ECB Lagarde speech.

Holidays in Asia this week

- Upcoming Chinese market holidays: Sept 29th (Sun); Tue Oct 1st to Mon Oct 7th; Sat Oct 12th.

Headlines/economic data

Australia/New Zealand

- ASX 200 opens +0.1% at 8,200.

- Australia sells A$500M v A$500M indicated in 3.25% Apr 2029 bonds; Avg Yield 3.5308% v 3.9389% prior; bid-to-cover: 3.52x v 3.47x prior.

- New Zealand PM Luxon: Tighter fiscal policy is aiding inflation fight - financial press conference.

- New Zealand Aug Credit Card Spending M/M: +1.3% v -0.3% prior; Y/Y: -3.1% v -3.7% prior.

China/Hong Kong

- Hang Seng opens +0.3% at 18,069; Shanghai Composite opens -0.1% at 2,734.

- (CN) China PBOC monthly loan prime rate setting (PR): leaves both rates unchanged.

- China State-owned banks seen buying US dollars onshore to prevent Yuan from appreciating too fast - US financial press.

- China said to consider removing 'major' home-buying curbs - US financial press.

- China sells 20-year Special Bonds; Avg Yield 2.1596% v 2.3300% prior.

- China issues new oil export quotas for the remainder of 2024 - press, citing consultants.

- Follow up: China and EU to spare 'no effort' in order to reach acceptable solution in trade dispute - China state media.

- China said to consider removing 'major' home-buying curbs [overnight update].

- Hong Kong Aug Unemployment Rate: 3.0% v 3.0%e [overnight update].

- China PBOC sets Yuan reference rate: 7.0644 v 7.0983 prior (strongest since May 29th, 2023).

- China PBOC Open Market Operation (OMO): Sells CNY572B in 7-day reverse repos; Net injects CNY336B v net injects CNY363B prior.

Japan

- Nikkei 225 opens +1.5% at 37,714.

- Bank of Japan (BOJ)  leaves target rate unchanged at 0.25%; as expected.

- Japan Aug national CPI Y/Y: 3.0% V 3.0%E; CPI ex fresh food (CORE) Y/Y: 2.8% V 2.8%E.

- Japan releases weekly flows data [period ended Sept 13th]: Foreign buying of Japan equities: -¥3.0T v -¥902.3B prior; Japan buying of foreign bonds: +¥2.10T v -¥216.5B prior (most equity sales by foreigners since week ended Sept 28th, 2023).

- Japan Fin Min Suzuki: US Fed Chair Powell's US economy view is consistent with Japan's view - pres.

- Japan Aug Crude Steel Output: 6.87Mts, -3.2% m/m, -3.9% y/y.

- Japan Securities Dealers Association (JSDA): Regional Japan lenders sold ¥329.9B in 2-5 year government debt in Aug [record amount sold of medium-term JBGs] - update.

- Japan, China said to be preparing to resume Chinese imports of Japanese marine products - NHK.

- Former BOJ official Atago said the central bank will likely prefer to scrutinize market developments for the time being [inline] – financial press.

Korea

- Kospi opens +1.0% at 2,611.

Other Asia

- (TW) Follow Up: Taiwan Economy Ministry: Parts of the pagers that exploded in Lebanon were not made in Taiwan.

- Thailand Central Bank (BOT) Gov Sethaput: Thai households remain fragile due to high debt levels (inline) - press.

- Taiwan Central Bank (CBC) Gov Yang: Mortgages are more concentrated than in 2009; RRR 25bps hike will absorb NT$125B - post rate decision press conference [overnight update].

- (TW) Taiwan Central Bank (CBC) leaves benchmark interest rate unchanged at 2.00%; as expected [overnight update].

North America

- (US) Former Pres Trump: Fed 50bps rate cut "was a political move".

- (CA) Bank of Canada (BOC) Dep Gov Vincent: BOC did not mean that downside risks have strengthened.

- US) Redfin: Mortgage applications are rising, but pending sales have yet to improve; Home prices are still rising, and Redfin agents report that some would-be buyers are waiting for mortgage rates to fall more.

- (US) BOFA institute: week-to-sept 14th total card spending +1.4% Y/Y V +0.9% average in Aug; Within sectors, entertainment saw the biggest increase since last week followed by department stores & furniture.

- (US) Initial jobless claimS: 219K V 230KE (lowest since late May); CONTINUING CLAIMS: 1.83M V 1.85ME.

- (US) Sept Philadelphia Fed business outlook: 1.7 V 0.0E; New Orders: -1.5 v +14.6 prior; Prices Paid: 34.0 v 24.0 prior.

- (US) Q2 current account: -$266.8B V -$260.0BE.

- (US) Aug existing Home Sales: 3.86M V 3.90ME.

- (US) Aug leading index: -0.2% V -0.3%E.

- (US) Treasury to sell $69B 2-year, $70B 5-year and $44B 7-year notes.

Europe

- (UK) Sept GFK Consumer Confidence: -20% v -13%e (lowest since Mar).

- (IL) US official says an Israel-Hamas ceasefire deal is unlikely to come before the end of Biden's term - press.

- (DE) German Bundesbank Monthly Report: Country may already be in mild recession; Sees Q3 domestic GDP may stagnate or decline slightly.

- (IL) Israel Sept 12-month CPI Forecast: 3.0% v 3.0% prior.

- (EU) ECB’s Panetta (Italy): Rate cuts by ECB could accelerate in next months.

- (UK) Bank of England (BOE) leaves bank rate unchanged at 5.00%; as expected; Most members favor 'gradual approach to removing policy restraint'.

- (UK) BANK OF ENGLAND (BOE) LEAVES BANK RATE UNCHANGED AT 5.00%; AS EXPECTED; Most members favor 'gradual approach to removing policy restraint'

- (UK) Bank of England (BOE) size announcement for QT over next 12 months: maintains pace at £100B; Notes high bar to amending QT schedule outside annual review.

- (TR) Turkey Central Bank (CBRT) leaves one-wee repo rate unchanged at 50.00%; as expected; Removes explicit reference to further tightening.

- (ZA) South Africa Central Bank (SARB) cuts interest rates by 25BPS TO 8.00%; as expected; decision was unanimous.

- (RU) Russia Pres Putin: We plan to raise production of drones by 10x this year (implies 1.4M drones).

- (UK) BOE Gov Bailey: Rates on gradual path down, more evidence needed; Services inflation in UK still elevated - press interview.

- (EU) EU's Dombrovskis (Trade Chief): Agreed to intensify talks with China on EVs - X post.

Levels as of 01:20 ET

- Nikkei 225 +2.0%; ASX 200 +0.62; Hang Seng +1.1%; Shanghai Composite -0.5%; Kospi +0.9%.

- Equity S&P500 FUTs -0.1%; Nasdaq100 FUTs -0.2%%, Dax -0.2%; FTSE100 -0.4%.

- EUR 1.1157-1.1170: JPY 141.97-142.93; AUD 0.6801-0.68.27; NZD 0.6225-0.6251.

- Gold +0.1% at $2,618/oz; Crude Oil -0.3% at $70.95/brl; Copper +0.7% at $4.3770/lb.