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Asian Equities Higher, Japanese Banks Benefit From Higher Yields

ASIA STOCKS
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Asian equities have climbed Friday as the latest round of US economic data signaled momentum is slowing, boosting the case for the Federal Reserve to start cutting interest rates this year. The MSCI Asia Pacific is trading up over 0.60% led by gains in Japan and Australia. Earlier we had Japanese Jobs, Tokyo CPI, Industrial Production and Retail Sales, South Korean Industrial Production and Australian Private Sector Credit. Elsewhere local rates have found some support, although JGBs yields are a touch higher this morning however off highs made on Thursday.

  • Japanese equities are higher today, banking stocks are the top performing sector today they are being well supported by higher yields as the 10Y trades just off multi year highs. Further moves higher may be limited as the market now awaits the Fed Reverse's favorite price gauge due out later today. Earlier, we had had a flurry of local data - Jobless rate was in line at 2.6%, Job-To-Applicate Ratio was 1.26 vs 1.28 est, Tokyo CPI was 2.2% vs 2.2% est, Industrial Production was -0.1% vs 1.5% est, while Retail Sales was 2.4% vs 1.7% est. The Topix is up 1.50%, with the Topix Bank Index up 2.02%, while the Nikkei 225 lags, trading up just 0.95%.
  • Taiwan equities are slightly lower today, foreign investors have been selling local stocks recently with a total outflow of just over $2b. Late on Thursday, GDP came in slightly above estimates at 6.56% vs 6.50% est and saw the economy grow at the fastest pace since 2021, while the bureau of statistics now expected GDP to hit 3.94% this year up from their most recent forecast of 3.43%. The Taiex is down 0.13% today and trades off 1.10% for the week. The index still trades above all major moving averages, although the 14-day RSI has fallen about 15pts to 60 and the MACD indictor is showing decreasing green bars.
  • South Korean equities are higher today. Earlier today we had industrial production come in well above consensus at 6.1% vs 4.4%, and SK chip stockpiles shrank at the fastest pace in 10 year showing just how much demand there currently is for especially for customers developing AI technologies. Samsung has contributed the most to the gains in the Kospi, although we are off morning highs and now trade just 0.50% higher for the session, the small-cap Kosdaq is up 0.35%.
  • Australian equities are higher today, although we are on track to close the week lower. Earlier, we had Private Sector Credit, which beat estimates coming in at 0.5% vs 0.4% and up from a revised 0.4% in March we also had a bond auction which was well recovered with a bid/cover ratio of 3.22x up from 2.57x from the last auction in March. Most sectors are in the green today, other than Material and Tech stocks. Currently the ASX200 is up 0.43%.
  • Elsewhere in SEA, New Zealand equities closed up 1.75% following the release of the budget on Thursday, Indonesian equities are 0.65% lower and have broken below Thursday and the YTD lows, Singapore equities are 0.30% higher, Indian Equities are 0.30% higher while Philippines & Malaysian equities are little changed.
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Asian equities have climbed Friday as the latest round of US economic data signaled momentum is slowing, boosting the case for the Federal Reserve to start cutting interest rates this year. The MSCI Asia Pacific is trading up over 0.60% led by gains in Japan and Australia. Earlier we had Japanese Jobs, Tokyo CPI, Industrial Production and Retail Sales, South Korean Industrial Production and Australian Private Sector Credit. Elsewhere local rates have found some support, although JGBs yields are a touch higher this morning however off highs made on Thursday.

  • Japanese equities are higher today, banking stocks are the top performing sector today they are being well supported by higher yields as the 10Y trades just off multi year highs. Further moves higher may be limited as the market now awaits the Fed Reverse's favorite price gauge due out later today. Earlier, we had had a flurry of local data - Jobless rate was in line at 2.6%, Job-To-Applicate Ratio was 1.26 vs 1.28 est, Tokyo CPI was 2.2% vs 2.2% est, Industrial Production was -0.1% vs 1.5% est, while Retail Sales was 2.4% vs 1.7% est. The Topix is up 1.50%, with the Topix Bank Index up 2.02%, while the Nikkei 225 lags, trading up just 0.95%.
  • Taiwan equities are slightly lower today, foreign investors have been selling local stocks recently with a total outflow of just over $2b. Late on Thursday, GDP came in slightly above estimates at 6.56% vs 6.50% est and saw the economy grow at the fastest pace since 2021, while the bureau of statistics now expected GDP to hit 3.94% this year up from their most recent forecast of 3.43%. The Taiex is down 0.13% today and trades off 1.10% for the week. The index still trades above all major moving averages, although the 14-day RSI has fallen about 15pts to 60 and the MACD indictor is showing decreasing green bars.
  • South Korean equities are higher today. Earlier today we had industrial production come in well above consensus at 6.1% vs 4.4%, and SK chip stockpiles shrank at the fastest pace in 10 year showing just how much demand there currently is for especially for customers developing AI technologies. Samsung has contributed the most to the gains in the Kospi, although we are off morning highs and now trade just 0.50% higher for the session, the small-cap Kosdaq is up 0.35%.
  • Australian equities are higher today, although we are on track to close the week lower. Earlier, we had Private Sector Credit, which beat estimates coming in at 0.5% vs 0.4% and up from a revised 0.4% in March we also had a bond auction which was well recovered with a bid/cover ratio of 3.22x up from 2.57x from the last auction in March. Most sectors are in the green today, other than Material and Tech stocks. Currently the ASX200 is up 0.43%.
  • Elsewhere in SEA, New Zealand equities closed up 1.75% following the release of the budget on Thursday, Indonesian equities are 0.65% lower and have broken below Thursday and the YTD lows, Singapore equities are 0.30% higher, Indian Equities are 0.30% higher while Philippines & Malaysian equities are little changed.