USD/JPY threatens ¥150; KR PM Han returns as acting-Pres

Asia Market Update: Mixed Asian equities in directionless start to week; USD/JPY threatens ¥150; KR PM Han returns as acting-Pres; Focus on UK, DE, EU, US Mar S&P PMIs.

General Trend

- Asian equities went nowhere, if slightly down, in flat trading, even as US Equity FUTs +0.7-0.8%; Kospi underperformed -0.3%, opening down, rising back to flat after PM Han was reinstated as acting Pres of South Korea by the Constitutional Court, but fell back thereafter to -0.3%.

- Uncertainty over what tariffs will look like from April 2nd continues to weigh significantly on expectations, both in terms of potentially increased tariffs against US-bound exports but also if various nations’ in-bound tariffs against US goods are reduced in bilateral deals with the Trump Admin.

- On the other hand, US’ Century Aluminum announced it would build the first new aluminum smelter in the US in 45 years, attributing the investment to Pres Trump’s new US tariffs.

- Heathrow Airport reopened for flights on Saturday morning, but disruption is expected to continue as carriers restart operations with planes, crews, and passengers scattered across the world..

- The US announced an investigation into the security risk of Chinese telco providers, including ZTE, Huawei and China Telecom - suspected of making an end run around existing FCC prohibitions by continuing to do business in America on a private or ‘unregulated’ basis.

- Also on the trade front, China govt said to be considering to curb US exports in an attempt to ‘mollify’ Pres Trump.

- Australia Manufacturing PMI jumped two Big Handles to 52.6 for the highest read since 2022.

- However, Japan PMIs disappointed, with a 9th month of Manufacturing contraction, Services contracting for the first time in 5 months, and the Composite also contracting to its worst level in over three years.

- Japan Fin Min, BOJ Dep Gov Uchida both warned in parliamentary testimony of “excessive FX movements” as USD/JPY once again pushed towards 150 handle. However, Gov Ueda’s was more sanguine in regards to FX, saying only that he thinks “currency is maintained by appropriate monetary policy”.

- Indonesian stocks continued being hammered, falling as much as 4% to below 6,000 for first time since 2021, lower than last Tuesday’s 6% crash.

- Investors appear to Not like Aussie homebuilder James Hardie announcing it would acquire US outdoor living manufacturer AZEK for $8.75B in a mix of cash and stock, JHX.AU -13.5%.

- US Sen Steve Daines [R-Montana], said to be close to Pres Trump, marked the first visit to China by a top US politician since Pres Trump took office. Daines was joined by senior execs of several US companies including FedEx CEO Subramaniam, Boeing Snr VP Nelson, Qualcomm’s CEO Amon and Pfizer’s CEO Bourla as well as Apple’s Tim Cook and CEO’s of Mastercard, Cargill, Eli Lilly and others.

- Chinese oil giant Sinopec profit fell 16% in FY24 due to China NEV demand and reduced oil prices..

- Toyota Said to delay plans for new battery plant in Fukuoka, Japan, due to 'slowing EV demand'.

- US equity FUTs +0.7% to 0.8% during Asian trading.

Looking ahead (Asian time zone)

- Mon Mar 24th (Mon eve UK, DE, EU, US Mar S&P PMIs).

- Tue JP BOJ Minutes, KR Consumer Confidence, (Tue eve DE Mar Business Climate).

- Wed AU Feb CPI, KR Business Confidence, (Wed eve UK Feb CPI, US Feb Durable Goods).

- Thu (Thu night US final Q4 GDP).

- Fri JP BOJ Summary of Opinions, (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 7,931.

- AUSTRALIA MAR PRELIMINARY PMI MANUFACTURING: 52.6 V 50.4 PRIOR (highest since 2022 and 3rd month of expansion); PMI Services: 51.2 v 50.8 prior (14th month of expansion).

- Australia sells A$300M v A$300M indicated in 4.75% Jun 2054 Bonds; Avg Yield: 4.9874% v 4.9405% prior; bid-to-cover: 2.71x v 3.65x.

China/Hong Kong

- Hang Seng opens +0.3% at 23,749; Shanghai Composite opens flat at 3,364.

- China MOF sells 5- Year and 7-year bonds.

- China Vice Premier He Lifeng meets US Sen Steve Daines [R-Montana] in Beijing in first visit by a top US politician since Pres Trump took office - Xinhua.

- China Customs said to enhance risk assessment of Fentanyl smuggling and improve ability to detect it - Financial press.

- China explores limiting exports to ‘mollify’ Trump; cites advisers to the Chinese government; China may offer to curb the quantity of 'certain' goods exported to the US. – WSJ.

- US FCC to launch broad investigation of Chinese telecoms that it suspects pose a security risk, including ZTE, Huawei, and China Telecom - FT.

- China Foreign Min Wang Yi, visiting Tokyo, says China, Japan and South Korea together have strong influence internationally.

- China Foreign Min, visiting Tokyo, says China, Japan and South Korea together have strong influence internationally.

- China PBOC reiterates will cut RRR and interest rates at appropriate time.

- China PBOC sets Yuan reference rate: 7.1780 v 7.1760 prior (weakest since Jan 20th).

- China PBOC Open Market Operation (OMO): Injects CNY135B in 7-day reverse repos; Net drains CNY346B v drains CNY88B prior.

Japan

- Nikkei opens +0.4% at 37,841

- JAPAN MAR PRELIMINARY PMI MANUFACTURING: 48.3 V 49.0 PRIOR (9TH STRAIGHT CONTRACTION); PMI Services: 49.5 v 53.7 prior (First contraction in 5 months; PMI Composite: 48.5 v 52.0 prior (Lowest since Feb 2022).

- Bank of Japan (BOJ) Gov Ueda: Cannot sell JBG holdings immediately; Have been gradually tapering holdings of govt bonds - Parliamentary testimony.

- Bank of Japan (BOJ) Dep Gov Uchida: Vital for FX to move in stable manner - Parliamentary testimony.

- Japan Fin Min Kato: Reiterates will take appropriate action against excessive moves in FX; Desirable for FX to move in stable manner - Parliamentary testimony.

- Toyota to delay plans for new battery plant in Fukuoka, Japan, due to 'slowing EV demand' - Japanese press.

- Japan PM Ishiba's cabinet approval drops 8.3% to 29.2% - Japanese press poll.

- Rengo [Largest trade union in Japan] Second Round Wage Data: Firms pledge wage hikes of 5.40% v 5.46% in first round.

Korea

- Kospi opens -0.3% at 2,636.

- South Korea Constitutional Court dismisses impeachment of PM Han in 7-1 vote; Restores Han's powers as acting President - Korean press.

- South Korea Court to begin arguments in impeached Pres Yoon's criminal trial on Apr 14th - press.

Other Asia

- (VN) Vietnam Dong falls to record low against USD.

- Malaysia Trade Min Aziz: Malaysia to crack down on Nvidia chip flows under pressure from the US; Washington suspects high-end chips are 'making it to China' despite trade controls - financial press.

North America

- Century Aluminium (CENX) (US) CEO: Announces to build first new aluminum smelter in the US in 45 years; "New Trump tariffs help us reinvest in the US" – Fox News interview (update).

- (US) Trump: Open to talks with China about tariffs; Having good talks with Putin and Zelenskiy; Confirms Air Force advanced jet contract awarded to Boeing [weekend update].

- (US) During his meeting with oil execs meeting this week, Trump reportedly told them that he would consider efforts the Admin might take to help oil firms fend off legal risks over climate issues – WSJ [weekend update].

- (CA) Canada PM Carney: Aim to have free internal trade by Canada Day (July 1st); Can increase GDP by C$250B by reducing internal trade barriers between provinces [weekend update].

- (US) Trump signs memorandum aimed at preventing abuses of the legal system and federal courts [weekend update].

Europe

- (TR) Turkey markets regulator eases margin trading requirements and stock buyback rules - financial press.

- (UR) Pres Zelenskiy: Talks in Saudi Arabia were 'constructive' - financial press.

- (EU) Reportedly France proposes using EU's most powerful trade tool for the first time against the US if Trump uses tariffs unfairly – press [weekend update].

- (UK) UK govt said to consider reducing or even abolishing its Digital Services Tax (DST) ahead of April 2nd US tariff deadline – press [weekend update].

- OPEC+: Seven nations, including Russia, Iraq, and Kazakhstan issue new plans to compensate for pumping above quotas; The 7 nations plan to cut output - financial. press.

Levels as of 00:20 ET

- Nikkei 225 flat, ASX 200 +0.1%, Hang Seng -0.1%; Shanghai Composite -0.2%; Kospi -0.3%.

- Equity S&P500 Futures +0.7%; Nasdaq100 +0.8%; Dax +0.4%%; FTSE100 +0.3%.

- EUR 1.0814-1.0840; JPY 149.31-149.83; AUD 0.6269-0.6295; NZD 0.5719-0.5750.

- Gold +0.2% at $3,053/oz; Crude Oil -0.3% at $68.08/brl; Copper +0.4% at $5.1320/lb.