JP equities lead while KR majors’ Q4 prelim profits underperform

Asia market update: JP equities lead while KR majors’ Q4 prelim profits underperform; Tokyo CPI in-line while household spending falls further, JP bond yields soft; CN equities attempt to recover recent losses; US CPI in focus on Thurs night.

General trend

- After yesterday’s holiday and following a strong overnight on Wall St, Japan equities shot up +1.8% shortly after the open to their highest levels since Mar 1990, with chip-relateds Advantest +8%, and Tokyo electron +4.5%, with Nintendo +4.5% (record high), Softbank +1.8% and Rakuten +5%. Gains later tempered by yen rebound.

- Kospi was weighed down by Samsung Electronics, LG Electronics and LG Energy all under-performing prelim profits.

- JP Tokyo Core CPI (leading indicator for national CPI) almost down to 2% target, leading to speculation that the BOJ may stay its hand with regard to ending NIRP in January. Meanwhile Japan household spending came in below expectations.

- Japan BOJ carried out its first bond auction of 2024 with the new Jan-Mar quarter's targets.

- Modest CN equity rebound amid ongoing RRR cut talk.

- Hong Kong equities lift from 13-month low.

- Recent EM Asia government bill sales supported by rate cut talk? [Philippines, Thailand].

- US equity FUTs slightly down in Asian trading.

Looking ahead (Asian time zone)

- Wed China New Yuan Loans.

- Thu Australia Balance of Trade.

- Thu night US CPI.

- Fri China CPI, PPI, Balance of Trade.

- Fri UK GDP and Industrial Production.

- Fri night US PPI.

Holidays in Asia this week

- N/A.

Headlines/economic data

Australia/New Zealand

- ASX 200 opens +0.2% at 7,467.

- AustraliaNov Retail Sales M/M: 2.0% V 1.2%E.

- Australia Nov Building Approvals M/M: +1.6% v -2.0%e.

- Australia ANZ Roy Morgan Weekly Consumer Confidence Index: 84.8 v 81.8 prior (update).

China/Hong Kong

- Hang Seng opens +0.2% at 16,256.

- Shanghai Composite opens flat at 2,887.

- Hong Kong Dec Foreign Reserves: $425.5B v $424.6B prior (overnight update).

- China PBOC official pledges to use various monetary tools to increase credit, and to promote stabilization and decrease of financing costs - Chinese press.

- China Pres Xi: Calls for winning tough battle against corruption, but situation remains severe and complex (overnight update).

- China regulator (CSRC) lifts ban on net-selling of shares by Mutual Funds - China press (overnight update).

- China reportedly told LGFVs to stop issuing 12-month offshore bonds - financial press (overnight update).

- China PBOC sets Yuan reference rate: 7.1010 v 7.1006 prior.

- China PBOC Open Market Operation (OMO): Sells CNY65B in 7-day reverse repos; Net drains CNY157B v drains CNY40B prior.

Japan

- Nikkei 224 opens +1.0% at 33,704.

- Japan Dec Tokyo CPI Y/Y: 2.4% V 2.5%E; CPI (ex-fresh food) Y/Y: 2.1% V 2.1%E.

- Bank of Japan (BOJ) announcement related to daily outright bond buying operation: (Note: Today is the first auction with the new Jan-Mar quarter's targets).

- Media suggestions that BOJ was likely a net seller of equities last year for the first time since launching its ETF purchase program in 2010 – Nikkei.

- Japan Econ Min Saito: Will work to assess ishikawa earthquake's impact on supply chains.

- Japan sells ¥4.00T vs. ¥4.00T indicated in 6-Month Bills; Avg Yield: -0.1723% v -0.1402% prior, bid-to-cover: 3.7x v 3.13x prior.

South Korea

- Kospi opens +1.2% at 2,598.

- South Korea Nov Current Account: $4.1B v $6.8B prior.

- Samsung Electronics (005930.KR) Reports prelim Q4 (KRW) Op 2.8T v 3.7Te (4.3T y/y), Rev 67.0T v 69.9Te (70.7T y/y).

- LG Electronics (066570.KR) Reports prelim Q4 (KRW) Op 312.5B v 661.5Be v 69.3B y/y, Rev 23.2T v 22.9Te v 21.9T y/y (overnight update).

- LG Energy (373220.KR) Reports prelim Q4 (KRW) Op 338.2B v 603.4Be (237.4B y/y), Rev 8.00T v 8.48Te v (8.54T y/y).

- Taeyoung Group founder speaks to press amid company difficulties and 'self-rescue plan' to recover - Korea pres.

Other Asia

- Voice of America correspondent: Sources in China said local Communist Party authorities are reportedly asking Taiwanese companies to provide a list of Taiwanese employees who are returning to Taiwan to vote in the Taiwan election on Sat, Jan 13th.

- Malaysia end-Dec Foreign Reserves: $113.5B v $112.8B prior.

- Thailand Dep Fin Min: Economy is in a crisis and needs a boost; Central bank tightening is too fast and too aggressive.

- Thailand sells THB60B vs. THB60B indicated in 3-month bills: Avg Yield: 2.1844% v 2.28514% prior; bid-to-cover: 3.03x v 1.65x prior.

- Singapore Dec Foreign Reserves: $351.0B v $345.5B prior.

- Philippines Nov Unemployment Rate: 3.6% v 4.2% prior.

- Malaysia PM Anwar: To encourage government-linked firms to cut foreign investments to 20-25%.

- Indonesia Dec Consumer Confidence: 123.8 v 123.6 prior.

- Indonesia Pres Jokowi tells Cabinet to speed up state spending in early 2024.

North America

- Juniper Networks (JNPR) HP Enterprise nears deal to buy Co as soon as this week for EV ~13.0B - WSJ (Juniper stock up ~22% A/H, while HPE stock down ~7% A/H).

- Match (MTCH) Elliott said to have ~$1.0B holding - discussing with Board the company's under performance and how to fix - WSJ.

- Boeing (BA) NTSB: No indication that decompression system or any plug discrepancies are linked to door blow out - press conference.

- (US) Fed’s Bowman (voter, hawk):Policy appear sufficiently restrictive to hit 2% goal; important upside inflation risks remain, still cautious.

- (US) Fed’s Bostic (voter): Inflation has come down more than he expected; The Fed is in a very strong position right now.

- (US) Nov consumer credit: $23.8B V $9.0BE.

- NY Fed Dec 1-year Inflation Expectations: 3.0% v 3.4% prior (3-year low).

Europe

- (UK) Dec BRC Sales LFL Y/Y: 1.9% v 2.4%e.

- (DE) German Chancellor Scholz: Confident that EU will manage to agree on financial aid for Ukraine at upcoming special summit.

- Reportedly first shipping carriers are entering agreements with the houthis to avoid attacks; first such agreements said to have been reached end-dec – Shippingwatch.

- MAERSKB.DK Exec: Has not entered deal on Red Sea passage [**Note: responds to ShippingWatch report that 'some' shipping firms entered into deals with the Houthis to avoid attacks].

- Eurozone Dec economic confidence: 96.4 V 94.2E.

- Eurozone Nov Retail Sales M/M: -0.3% V -0.3%E; Y/Y: -1.1% V -1.5%E.

- Eurozone Jan Sentix investor confidence: -15.8 V -15.8E (highest since May 2023).

Levels as of 00:20 ET

- Nikkei 225 +1.1%; ASX 200 +0.9%; Hang Seng +0.6%; Shanghai Composite +0.1%; Kospi -0.2%.

- Equity S&P500 Futures -0.1%; Nasdaq100 -0.1%; Dax -0.2%; FTSE100 +0.3%.

- EUR 1.0949-1.0966; JPY 143.43-144.29; AUD 0.6712-0.6734; NZD 0.6238-0.6267.

- Gold +0.3% at $2,038/oz; Crude Oil +0.1% at $70.82/brl; Copper +0.2% at $3.8288/lb.