Asia-Pacific stocks trade higher, BOJ leaves no change in yield range

Bank of Japan Governor Haruhiko Kuroda said at a press conference Wednesday afternoon that there was no need to widen its yield curve control range. Reuters translation.

“There is no need to widen the band further around our yield target,” Kuroda was quoted as saying.

“It has not been long since we decided on our actions in December. It will take some more time for the actions to start working on correcting market activity,” he said.

The Bank of Japan kept interest rates at an abysmal -0.1% No changes were made For its yield curve control band.

– Jihye Lee

Morgan Stanley estimates that the Chinese stock market will emerge as the best performer in 2023.

The MSCI China Index will hit 80 and the Hang Seng Index will rise to 24,500 by the end of the year, said Laura Wang, chief China equity strategist at Morgan Stanley. This would be a 15% upside from where the market is trading now.

“This actually indicates that the Chinese stock market will lead the global stock market performance by 2023, so it’s time to return to China,” he noted.

Wang’s recommendation is to buy stocks of large-cap and more liquid Internet names.

The internet sector “has a very high correlation with the general pace of consumption growth in China”, especially in the country’s post-Covid recovery journey, he said.

Many global institutional investors are still significantly underweight these large-cap liquid names, Wang said.

– Lee Ying Shan

Semiconductor stocks are expected to bounce back after roughly 2022 — and fund manager Trent Masters says the two stocks are well-placed to avoid volatility.

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– Javier Ong

Oil prices are supported by China’s optimism and the reopening of fuel demand, with OPEC forecasting that Chinese oil demand is on track for a rebound.

Brent Crude futures rose 0.85% to $86.65 a barrel, while U.S. West Texas Intermediate Futures rose 0.91% to $80.91 a barrel.

“Chinese oil demand is rebounding due to the recent relaxation of the country’s zero-covid measures,” OPEC’s Monthly oil report Said.

It said China’s first-quarter oil demand is expected to pick up annual growth by 0.2 million barrels per day in the fourth quarter of 2022 from a year-on-year decline of 0.3 million barrels a day.

– Lee Ying Shan

The The Japanese yen weakened against the greenback The Bank of Japan surprised markets by keeping its yield curve tolerance band unchanged.

The Japanese yen After the announcement, it weakened 2.04% against the US dollar and last traded at 130.94.

“Japan’s economy is expected to continue to grow at a pace above its potential growth rate,” the central bank said in a statement.

The Bank of Japan also kept its interest rate unchanged at an ultra-dovish -0.1% – in line with expectations and maintaining the same rate it has held since 2016.

-Jihye Lee, Lee Ying Shan

Hong Kong-listed gaming stocks rose after China The license approved 88 gamesThese include NetEase, Tencent Holdings and miHoYo, further easing Beijing’s gaming crackdown.

Shares NetEase It rose as much as 6.81% in early trade, hitting its highest in more than four months. Tencent Shares gained 0.11%.

– Lee Ying Shan

The Bank of Japan will widen its 10-year Treasury yield curve control range by another 50 basis points to a range of 1% below and above its 0% target, UBS Global Wealth Management Managing Director Tan Teck Leng said.

“A scenario where the YCC is completely abandoned is unlikely,” he told CNBC’s “Squawk Box Asia,” adding that a move would be “uncharacteristic” of the central bank.

“The easiest thing for them to do is remove the cap and let it see a fair value – but again that comes with a lot of uncertainty, which is why, as a middle ground, we think they should at least raise it. A 1.0% cap,” he said.

Yield on 10thAnnual Japanese government bonds It breached the upper ceiling of its band for the 5th consecutive session on Wednesday morning ahead of the BOJ’s monetary policy announcement.

Japan’s private sector manufacturing orders for November fell 8.3% from the previous month. According to official data.

The drop was significantly larger than Reuters’ expectations for a 0.9% decline. On an annualized basis, manufacturing orders fell 3.7%.

Private sector machinery figures exclude orders for ships and turbines for electric power companies.

– Lee Ying Shan

As electric cars become increasingly popular, a new manufacturing technique that could make them more affordable is gaining interest, according to Morgan Stanley.

Some automakers are outsourcing the process, which could benefit three leading Asian parts suppliers, according to the Wall Street bank.

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– Ganesh Rao

The Dow Jones Industrial Average ended the day lower as Goldman Sachs shares weighed on the stock index.

The Dow lost 391.76 points, or 1.14%, to close at 33,910.85. The S&P 500 fell 0.2% to 3,990.97. The Nasdaq Composite rose 0.14% to end at 11,095.11.

– Tanaya Machel

According to Bank of America, a recession will not start until late 2023 now, as consumer spending remains stronger than expected and the Federal Reserve eases the intensity of its interest rate hikes.

“We are pushing back the timing of our outlook for a mild slowdown in the U.S. economy by a quarter, driven by strong labor markets, excess savings, declining energy prices and easy financial conditions,” the firm said. A customer reference. “That said, we think the headwinds will reduce consumer spending and increase savings rates as the year progresses.”

That puts the recession in its second quarter, an investment-led slowdown that spills over into consumer spending.

After raising its benchmark lending rate by 4.25 percentage points in 2022, the central bank is expected to ease again with a 0.25 percentage point increase in February. An additional quarter point increase is forecast to follow in March and May.

The company said the rate cut won’t come until 2024.

– Jeff Cox

Goldman Sachs shares fell 2.4% after Wall Street The investment bank shared its fourth-quarter earnings results, which it missed Expectations of analysts at top and bottom levels.

The bank reported earnings of $3.32 per share on revenue of $10.59 billion. According to analysts surveyed by Refinitiv, consensus estimates call for earnings of $5.48 a share on revenue of $10.83 billion.

Provisions for loan losses also came in slightly higher than expected.

– Hugh Son, Samantha Subin