Japan Markets Underperform Amid Yen & Local Yield Strength

Regional equities are weaker across the Asia Pac region. Japan markets are down the most amid a strong yen and local yield backdrop. All other markets are weaker albeit to varying degrees. This follows a weaker US lead in cash trading on Wednesday. US futures are close to flat in the first part of Thursday trade. Eminis last near 4554, Nasdaq futures at 15813.

• Japan's Nikkei 225 is off ~1.7% at this stage. We had a sharp drop in JGB futures in early trade, with further downside momentum post a poor 30yr auction. Coupled with yen strength (the only currency up in the G10 space), which has been an additional headwind.
• Hong Kong's HSI is also down sharply to the break, off 1.46%. The tech sub index is off 1.79%, unwinding all of yesterday's bounce at this stage.
• The CSI 300 is also weaker, off 0.44% at the break. Further Moody's rating outlook downgrades have weighed, while slightly better than expected export growth hasn't materially lifted sentiment.
• For South Korea, the Kospi is close to flat, while the Taiex is off 0.35%.
• In SEA, Thailand markets are the weakest performer, off more than 1% at this stage. Nov consumer prices fell slightly more than the market expected, but core was steady/ Consumer confidence ticked up in the month.