Equities Head Lower After Higher US CPI, Yen Continues To Weaken

Regional Asian equities fell after higher-than-expected US inflation data supported the view the Federal Reserve may keep interest rates higher for longer, although most markets are well off their opening lows. The yen has weakened, reaching a low of 153.24, before settling back at 152.81, while global yields have surged higher. South Korea has returned from their break yesterday with SK President suffering a defeat in parliamentary elections, while Taiwan exports surged in March.

• Japan equities have fallen for a second day, after US inflation data supported the view the Federal Reserve may keep interest rates higher for longer, which dampened investors’ sentiment for riskier assets. JGBs yields are near or have made new highs, while the yen rebounded slightly after weakening to levels not seen since 1990 against the dollar, investors are likely to take a cautious stance as the weakening has sparked fresh speculation Japanese authorities might step into the market to support the currency. The Japanese Finance Minister Suzuki spoke earlier where he emphasized the importance of stable FX movements reflecting fundamentals, although he refrained from commenting on daily FX fluctuations. The Nikkei 225 is down almost 0.60% at 39,220, while the Topix is now unchanged
• South Korean has returned from their break on Wednesday where SK President Yoon Suk Yeol has suffered a major defeat in parliamentary elections, reducing his legislative influence and facing increased opposition to his agenda, including investor-friendly policies. The election outcome could impact key policies, including the abolition of a capital gains tax and efforts to boost stock valuations. Challenges such as inflation, housing prices, and a labor dispute have also influenced voter concerns. The Kospi has opened down 0.70%.
• Taiwan's exports experienced a significant surge in March, with shipments of computer hardware, particularly those supporting the global AI industry, skyrocketing by over 400% in March. This propelled overall exports to $41.8 billion, marking the fastest growth rate in two years. While semiconductors, the largest export category, saw a decline, other tech-related products thrived. Import growth, particularly in aircraft purchases, unexpectedly rose by 7.1%, contrary to economist forecasts for a contraction. The Taiex is down just 0.15%
• Australian equities are lower today, down 0.85%. Real Estate and Consumer Discretionary stocks are the worst performing sectors. The ASX200 briefly traded below the 20-day EMA however this was quickly met with buyers.
• Elsewhere in SEA, New Zealand equities are down 0.90%, Singapore has returned from its break and is down 0.90%