Equities Head Lower, US Rate Cut Expectations Are Pushed Out To Dec

Asia markets have tacked US equities lower, following higher than expected US PMIs which caused US yields to push higher as rate cut expectations get pushed out to December from November. Earlier, Japan's CPI beat estimates although it did fall from the month prior, the 10Y yield continues to trade near 1% while the market prices about a 10bps hike for the July meeting, there is little else on the regional calendar today.

• Japanese equities have opened lower today, inflation eased for the second month falling to 2.5% from 2.7% in March, while the yield on 10-year government bonds exceeded 1% as markets anticipate a possible rate hike by the BoJ in July. Despite cooling prices, speculation on further policy tightening persists, with some experts expecting the BOJ to wait until October to raise rates again, potentially increasing pressure on the yen which has slipped back above 157. The Topix is down 0.30%, while the Nikkei 225 is down 1.03%.
• Taiwan equities have followed global markets lower this morning, TSMC lead the decline, although it's off opening lows. China commenced its most extensive military drills in a year around Taiwan on Thursday, increasing pressure on President Lai Ching-te just days after his inauguration. Despite this, markets have remained calm. The Taiex is down just 0.08%
• South Korean equities are lower today amid board risk-off sentiment in the region, Samsung Electronics has been the biggest contributor to the losses and the Kospi is now on track for its worst weekly performance for the month. The Kosdaq is down 0.70%, while the Kospi is down 1%.
• Australian equities are tracking global markets lower, all sectors are in the red other than energy stocks. The ASX200 is down 1%, and is now testing the 50-day EMA, a break below here could signal a move to 7,636 and the 100-day EMA.
• Elsewhere in SEA, New Zealand equities closed down 0.60%, earlier the trade Balance surplus narrowed, Singapore equities have fallen 0.47%, Malaysian equities are down 0.65%, while the Philippines PSEi are down 0.70%, while Indian equities are down 0.20%