Tariff concerns continue to drag on Asian equities, focus on core US Feb core PCE

General trend

- Japanese automakers down heavily for a second day on US tariff fears, -4% for Toyota and Honda again, with the Nikkei down >2% to a 2-week low as the Kospi also hit a two-week low, -1.8%. Hang Seng Tech index has fallen steeply in recent days, -10% from its March highs, into correction territory. Hang Seng’s main index up initially, but caught the same bug and fell 1% as the session continued. Against the trend the Singapore bourse hit a record high today.

- Japan PM Ishiba openly discussed the possibility of liquidity support measures for companies amid Trump tariff uncertainty. Follows on from Korea comments yesterday that domestic auto companies to experience 'considerable difficulties' due to US tariffs and Canada PM Carney comments that tariffs “will hurt us”, threatening retaliatory tariffs.

- Japanese assets look past BOJ SOP and Tokyo CPI and Full Year End on Mon Mar 31st: USD/JPY was back to early March highs after the BOJ Summary of Opinions, accelerated by Japan PM Ishiba concerns about the ‘very big’ impact US auto tariffs will have on the Japanese economy, including employment and the and “the need to consider cash flow measures on US auto tariffs”. Japan Mar Tokyo Core CPI came in hottest since January.

- BOJ Summary of Opinions for March 19th decision (to hold at 0.50%) said the BOJ will need to consider options including a shift from its current accommodative monetary policy stance to a neutral one.

- After reaching to the Mar 3rd high of near 151.30, USD/JPY fell back to 157.85, seemingly a technically driven move more than by events of the day.

- Potential impact of US tariffs and thus extra capacity being moved to the US being highlighted by TSMC, Intel and other top chipmakers said to slow Japan and Malaysia expansions; TSMC to slow its planned plant expansion in Kumamoto, Japan, after having only confirmed expansion back in December and amid $165B investment into the US. Hyundai Steel also closing a Korean plant after earlier in the week announcing fresh $5.8B investment into the US.

- Australia PM Albanese announces election day is on May 3rd.

- US Steel +6.6% after said to be in "active talks" with Nippon Steel about a deal that would maintain the $55/shr price secure additional funds.

- Further new highs for Gold, Spot to $3,077/oz and FUTs to $3,114/oz, with a near $40 spread.

- US equity FUTs largely flat during Asian trading.

Looking ahead (Asian time zone)

- Fri Mar 28th (Fri night US Feb Core PCE).

Holidays in Asia this week

- Fri Mar 28th Indonesia.

Headlines/economic data

Australia/New Zealand

- ASX 200 opens -0.1% at 7,966.

- Australia sells A$700M v A$700M indicated in 1.25% May 2032 bonds; Avg Yield: 4.2349% v 3.5253% prior; bid-to-cover: 4.45x v 2.95x prior.

- Australia PM Albanese announces Election day is on May 3rd.

- New Zealand Mar ANZ Consumer Confidence: 93.2 v 96.6 prior.

- New Zealand Feb Filled Jobs M/M: 0.1% v 0.3% prior.

China/Hong Kong

- Hang Seng opens +0.4% at 23,672; Shanghai Composite opens -0.1% at 3,372.

- US and China said to be attracting 75% of funding for robotics start ups - financial press.

- Civil Aviation Administration of China (“CAAC”): Led a delegation to Germany and held talks with EU Aviation Safety Admin in Cologne on Mar 24-26th.

- China car suppliers face 'strains' amid rise in receivables; cites delayed payments by automakers - China Securities.

- China Industry Ministry: China aiming for 3-5% increase in domestic Bauxite resources and recycled Aluminium output of >15M tons by 2027 - financial press.

- China says it is 'unaware' of its No 3 Military Official being supposedly probed - financial press.

- China Pres Xi said to again meet with foreign CEOs and Execs at Beijing's Great Hall of the People – press.

- China Pres Xi said to meet with Qualcomm, Mercedes and BMW CEOs – press [overnight update].

- China Vice Premier He Lifeng: Met with EU trade commissioner Sefcovic in Beijing; China willing to work with EU to jointly oppose unilateralism and protectionism - China state press [overnight update].

- Xpeng (9868.HK) Co's flying car said to have completed trial flight in Hunan, Central China - financial press.

- China reportedly to add jobs in major construction projects – press [overnight update].

- China Foreign Ministry: Trump's new tariffs on imported vehicles violates WTO rules [overnight update].

- China PBoC Dep Gov Xuan: Monetary policy faces unprecedented uncertainty - Boao forum [overnight update].

- China FX Regulator SAFE Dep chief Xuan Changneng: Reiterates stance to keep Yuan exchange rate basically stable [overnight update].

- China PBOC sets Yuan reference rate: 7.1752 v 7.1763 prior.

- China PBOC Open Market Operation (OMO): Injects CNY79B in 7-day reverse repos; Net drains CNY15B v drains CNY50B prior.

Japan

- Nikkei 225 opens -1.2% at 37,357.

- JAPAN MAR TOKYO CPI Y/Y: 2.9% V 2.7%E; CPI EX-FRESH FOOD Y/Y: 2.4% V 2.2%E (hottest Core since Jan).

- BANK OF JAPAN (BOJ) SUMMARY OF OPINIONS FOR MAR 19TH: Downside risks stemming from the US have heightened recently; (However), the Bank will need to consider options including a shift from its current accommodative monetary policy stance to a neutral one.

- Japan PM Ishiba: Japanese economy impact from US auto tariffs will be 'very big' - financial press.

- Japan Fin Min: No comment on equity market movement; affirms will assess US tariff impact on the domestic economy.

- TSMC, Intel and other top chipmakers slow Japan and Malaysia expansions - Nikkei.

- Reportedly 200+ companies may be cut from Tokyo Stock Exchange as reform period ends - Nikkei Asia.

- BOJ Outright Bond Purchase Operation for 3~5 Years; 5~10 Years and 10~25 Years; Purchases unchanged.

- IEA Chief Birol calls for Japan to restart dormant nuclear power plants to meet growing energy demand – press [overnight update].

Korea

- Kospi opens -0.6% at 2,592.

- South Korea Trade Ministry: Domestic auto companies to experience 'considerable difficulties' due to tariff to be imposed by the US [overnight update].

- (PO) Poland Deputy Min: Germany, French, Turkish, and South Korea firms vie for ammunition production partnership with Poland; Will choose JV partner by mid-2025 [overnight update].

Other Asia

- (ID) Danantara CIO: Indonesia Sovereign Wealth Fund understands concerns about transparency - financial press TV interview.

- (PH) US Sec of Defense Hegseth: Wants to express 'ironclad' commitment to the mutual defense treaty; very committed to the alliance between the US and Philippines.

- Singapore Feb M2 Money Supply Y/Y: 6.3% v 6.0% prior; M1 Money Supply Y/Y: 9.5% v 9.3% prior.

- Taiwan Feb Monitoring Leading Indicator: 37 v 34 prior [overnight update].

North America

- (US) Elon Musk: Reiterates the goal of DOGE is to reduce US deficit by $1T, to achieve 'most' of the cutting objective within a 130-day tenure - Fox News pre-interview release.

- (US) Budget Dir Vought: considering recission package - Fox Business.

- (US) Fed's Collins (voter): Outlook has gotten much cloudier for inflation and growth; Tariffs will inevitably increase inflation in the near term; It remains a question as to how long tariff driven inflation will last.

- (US) Fed’s Barkin (non-voter for 2025): A dense fog has fallen as federal policy changes have created near term instability; Fed is waiting for uncertainty to clear before acting.

- (CA) Ontario Premier Ford: No plan yet to reimpose electricity export taxes on US customers.

- (US) Reportedly Trump administration directs spy satellite agencies to surveil US-Mexico border; Multiple defense contractors, new and legacy ones alike, are in talks with various government agencies to aid the border-security work - press.

- (MX) Mexico Feb Trade Balance: +$2.2B v -$0.5Be.

- (BR) Brazil mid-Mar IBGE Inflation IPCA-15 M/M: 0.6% v 0.7%e; Y/Y: 5.3% v 5.3%e.

- (US) HHS Secretary Kennedy reportedly plans to significantly cut the size of the department he leads; Plans 10K job cuts - WSJ.

- (US) Q4 FINAL GDP ANNUALIZED Q/Q: 2.4% V 2.3%E; PERSONAL CONSUMPTION: 4.0% V 4.2%E.

- (US) Q4 FINAL GDP PRICE INDEX: 2.3% V 2.4%E; CORE PCE PRICE INDEX Q/Q: 2.6% V 2.7%E.

- (US) FEB ADVANCE GOODS TRADE BALANCE: -$147.9B V -$139.0BE.

- (US) INITIAL JOBLESS CLAIMS: 224K V 225KE; CONTINUING CLAIMS: 1.856M V 1.886ME.

- (MX) Pres Sheinbaum: Working on a thorough response to auto tariffs; We're going to give an integral response to tariffs after April 2nd.

- (MX) MEXICO CENTRAL BANK (BANXICO) CUTS OVERNIGHT RATE BY 50BPS TO 9.00%; AS EXPECTED.

- (CA) Canada PM Carney: Convened cabinet meeting this morning on Canada-US relations.

- (US) FEB PENDING HOME SALES M/M: 2.0% V 1.0%E; V -4.6% PRIOR; Y/Y: -7.2% V -3.5%E.

- (US) WEEKLY EIA NATURAL GAS INVENTORIES: +37 BCF VS. +24 BCF TO +26 BCF INDICATED RANGE.

- (US) Mar Kansas City Fed Manufacturing Activity: -2 v -5e.

Europe

- (CA) US Pres Trump and Canada PM Carney to speak on Friday, Mar 27th - Press.

- (IE) Ireland Mar Consumer Confidence Index: 67.5 v 74.8 prior.

- (UR) Russia's Putin: Suggests possibility of placing Ukraine under a temporary administration to allow for elections and signature of accords - Russian press.

- (EU) ECB’s Villeroy (France): Increase in long term yields, all things being equal, tightens financial conditions; France needs to bring back deficit to 3%.

- (SE) Sweden Central Bank (Riksbanks) Breman: Monetary policy contributes to stability in a turbulent world.

- (EU) Commission spokesperson: EU preparing response to new US import tariffs; No timing yet.

- (EU) ECB's De Guindos (Spain): We're optimistic when it comes to inflation, including services.

- (UK) PM Starmer Spokesperson: Disappointed by US auto tariffs; All options are on the table; Won't hesitate to stand up for British industry.

- (UR) Pres Zelenskiy: US is 'constantly' changing terms of minerals deal; Ukraine will give US evidence of Russia violating the ceasefire; Russia hit the energy facility in Kherson with artillery; Expects a reason from Washington as promised.

- (EU) Germany Chancellor Scholz: Trump's decision on car tariffs is wrong; US is on a path from which there will be only losers; Tariffs hurt prosperity for everyone.

Levels as of 00:20 ET

- Nikkei 225 -2.4%, ASX 200 +0.2%, Hang Seng -1.0%; Shanghai Composite -0.7%; Kospi -2.3%.

- Equity S&P500 Futures +0.1%; Nasdaq100 flat; DAX +0.2%; FTSE100 flat.

- EUR 1.0785-1.0802; JPY 150.71-151.21; AUD 0.6281-0.6306; NZD 0.5712-0.5744.

- Gold +0.8% at $3,114/oz; Crude Oil -0.3% at $69.72/brl; Copper -0.5% at $5.0930/lb.