Sharp Japan Pull back, Amid Stronger Yen, HK & China Outperforming

Asia stocks are mixed to start the week. Japan markets are down sharply, the Topix off more than 2%, while the Nikkei 225 is down almost 2.5%. A combination of a stronger yen (particularly post the onshore close on Friday), coupled with weaker tech trends are weighing. The electric appliances sector is the main drag on the Topix.

• There are firmer trends for Hong Kong and China markets. The HSI is up around 1% at this stage, which is down from best levels. The properties sub index is higher, amid a further rise in weekend property transactions (to a 3yr high, per BBG). Tech stocks are also higher.
• The CSI 300 was last around 0.50% higher. Hopes that the stronger consumer inflation report from Saturday is a sign of better consumer demand is being cited as support. Some sell-side names have shifted their views on rate cuts though. The 1yr MLF is expected to be held steady at 2.50% this Friday.
• Elsewhere, the Kospi and Taiex are down modestly, around 0.40% each. We had a negative lead from US tech stocks on Friday, which is likely at the margins.
• The ASX 200 is down over 1.5%, weighed by the materials sector. Iron ore prices are lower, while other commodity indices were down on Friday. Financials are also weaker.
• Earlier trends in SEA is mostly weaker, with Philippines stocks off 0.80%, among the weakest performers.