Japan Stocks Lose Further Altitude, US Futures Tracking Lower

Equity sentiment has softened throughout the region as the Thursday session progressed, although China markets were more mixed as we heard from a host of regulators at a forum in Shanghai. Japan markets have been among the weakest performers. US equity futures are also tracking lower, with Eminis down 0.25% (last near 4264), while Nasdaq futures have dipped -0.45%, sitting around session lows currently.

• In Japan, the Nikkei 225 is off by around 1% continuing its recent pull back. This has perhaps weighed on US futures moves. Deutsche Bank cut its Japan stock weight to 5% from 25%, amid waning Asia momentum from a strategy standpoint. Mizuho also cut its long term prime rate to 1.3%, effective tomorrow. Tech related plays have been another source of weakness for Japan bourses.
• We heard from a host of China officials, including the head of NFRA and the PBoC Governor. A lot of focus was regulation and reducing financial risks, whilst also encouraging innovation and greater access to foreign firms. They pledged that the financial sector would support the real economy.
• Property equities rebounded from earlier losses, the CSI 300 property index up 1.25% at the break. Li, the head of the NFRA, stated China will push redevelopment of urban villages in big cities. Aggregate China equity indices are more muted though. Earlier we got confirmation of the major bank deposit rate cut.
• The Taiex lost 1% and the Kospi is down 0.65% at this stage.
• SEA markets are mixed.