Chinese & Japanese Equities Nudge Lower

Hawkish comments from the Federal Reserve and a lack of action when it came to the PBoC’s latest round of MLF operations (no rate cut and a basic rollover of maturing liquidity provisions, vs. expectations for a rate cut and net injection) provided headwinds for the equity markets that were open during Asia-Pac hours.

• Chinese equities slipped on the above, although the prospect of an imminent RRR cut (based on recent State Council guidance) limited losses. The CSI 300 is -0.5% at typing. Note that northbound Hong Kong-China Stock Connect flows are relatively neutral at present.
• A weaker JPY provided some support for Japanese equities which allowed the Nikkei 225 to unwind most of its early, Wall St. driven downtick. Still, the index sits ~0.3% lower ahead of the bell.