Yen stabilizes as JP refuses to confirm intervention

Asia Market Update: Yen stabilizes as JP refuses to confirm intervention; AU Retail Sales go negative and take A$ along with it; JP Retail Sales also miss heavily; CN PMIs mixed; EU Q1 GDP tonight, FOMC tomorrow night.

General trend

- After yesterday’s price gyrations, the Yen settled down as USD/JPY traded within a reasonably consistent band of 156-157. Top FX diplomat Kanda refused to say whether intervention took place or not, saying the FX intervention operations will be available at end of May.

- Post-holiday and yesterday’s Yen action, 10-Year JGB yields fell 5bps to 0.870%.

- Aussie dollar lost -0.5% after March Retail Sales came in surprisingly negative, with the Aussie Stats Agency saying that outside of the pandemic period and introduction of the GST, this is the weakest growth on record when comparing turnover y/y.

- AU 3-yr yields fell -9bps, almost back down to 4%.

- Poor business confidence readings continued out of New Zealand.

- Mixed China PMI's: China official manufacturing PMI came in slightly higher than expected, but non-manufacturing PMI was a full point below estimates. Meanwhile, Caixin manufacturing PMI delivered its highest reading since February, 2023.

- Heading into a three day holiday, China PBOC Net injected CNY438B in market ops.

- US equity FUTs slightly down to flat during Asian trading.

Looking ahead (Asian time zone)

- Tue Apr 30th (Tue eve EU Q1 GDP).

- Wed May 1st NZ Q1 Employment, (Wed night US Apr ISM Mnfg, Mar JOLTS and FOMC rate decision).

- Thu May 2nd AU Balance of Trade, JP Consumer Confidence, BOJ MoPo Minutes [2 mtgs ago, Mar 19th].

- Fri May 3rd AU Mar Home Loans & Investment (Fri night US Apr NFP, Apr ISM Services).

Holidays in Asia this week

- Tue Apr 30th Vietnam.

- Wed May 1st China, Hong Kong, India, Indonesia, Malaysia, Philippines, Singapore, South Korea, Thailand, Taiwan, Vietnam.

- Thu May 2nd China,

- Fri May 3rd China, Japan.

Headlines/economic data

Australia/New Zealand

- ASX 200 opens flat at 7,636.

- AUSTRALIA MAR RETAIL SALES M/M: -0.4% V +0.2%E.

- Australia Mar Private Sector Credit M/M: 0.3% v 0.4%e; Y/Y: 5.1% v 5.0% prior.

- Australia ANZ Roy Morgan Weekly Consumer Confidence Index: 81.1 v 80.3 prior.

- New Zealand Apr ANZ Business Confidence: 14.9 v 22.9 prior.

- New Zealand Q1 Job Ads Q/Q: -5.4%.

China/Hong Kong

- Hang Seng opens +0.5% at 17,843; Shanghai Composite opens -0.1% at 3,110.

- CHINA APR MANUFACTURING PMI (GOVT OFFICIAL): 50.4 V 50.3E.

- CHINA APR CAIXIN PMI MANUFACTURING: 51.4 V 51.0E (Highest since Feb 2023).

- (AR) China PBOC Gov Pan meets Argentina Foreign Minister and Central Bank Chief to 'discuss financial cooperation' - financial press.

- China Q1 domestic travel +16% y/y, domestic travel spending +17% y/y - Chinese state media.

- China PBOC may keep liquidity stable with ‘precise’ operation – Chinese press.

- China to extend tariff exemptions for imports of some US products until Nov 30th, 2024; Items continue to include rare earth metal ore and radar equipment for navigation [overnight update].

- China Foreign Ministry Daily Briefing: Pres Xi to visit France, Serbia and Hungary to push for global peace and development [overnight update].

- China Vanke (000002.CN) Reports Q1 (CNY) Net -362M v +1.45B y/y, Rev 61.6B -10% y/y [overnight update].

- China PBOC sets Yuan reference rate: 7.1063 v 7.1066 prior.

- China PBOC Open Market Operation (OMO): Sells CNY440B in 7-day reverse repos; Net injects CNY438B v CNY0B prior.

Japan

- Nikkei 225 opens +1.0% at 38,312 (post-Monday holiday).

- JAPAN MAR PRELIMINARY INDUSTRIAL PRODUCTION M/M: 3.8% V 3.3%E; Y/Y: -6.7% V -6.3%E.

- JAPAN MAR RETAIL SALES M/M: -1.2% V -0.2%E; Y/Y: 1.2% V 2.4%E.

- JAPAN MAR JOBLESS RATE: 2.6% V 2.5%E.

- Japan's top FX diplomat Kanda: Responding to FX "24 hours a day"; Reiterates will take appropriate action as needed - Japanese press.

- JAPANESE FINANCE AUTHORITIES REPORTEDLY INTERVENED IN FX MARKET (AS SPECULATED) - US PRESS [**Note: would be first intervention since fall 2022] [overnight update].

- Japan top FX diplomat Kanda: Will continue to take appropriate action against excessive FX moves; Declines again about intervention; Not targeting specific levels [Will disclose if there was FX intervention in end-May in the monthly report] [overnight update].

- Tier1 analysts see BOJ would prefer to wait until Sept 2024 to deliver its next rate hike from 0.10% to 0.25% but weakening Japanese yen implies that there is a high risk the next hike could be pulled forward to July [overnight update].

South Korea

- Kospi opens +0.2% at 2,693.

- South Korea Mar Industrial Production M/M: -3.2% v 0.5%e prior; Y/Y: 0.7% v 4.6%e.

- China's Vice Premier He Lifeng: Welcomes Korean firms to expand investment in China – press.

Other Asia

- IMF Asia Pacific Dir Srinivasan: Asian Central Banks should focus on fundamentals and domestic conditions rather than Fed moves - financial press, on release of IMF’s Regional Economic Outlook for Asia and Pacific.

- Thailand Central Bank (BoT) Gov: Short term boost from rate cut would not be efficient trade off; Current interest rate is supportive of economic recovery [overnight update].

North America

- (US) Sec of State Blinken: Hopeful Hamas will accept extraordinarily generous Gaza deal; Reaffirms US opposes planned Israel offensive on Rafah - comments from Saudi Arabia.

- US) APR DALLAS FED MANUFACTURING ACTIVITY: -14.5 V -11.3E.

- (US) TREASURY QUARTERLY FINANCING ESTIMATES: TO BORROW $243B IN APR-JUNE QUARTER V $177Be AND $202B PRIOR ESTIMATE; JUL-SEP Q3 EST SET AT $837B v $750Be.

Europe

- (UK) Apr BRC Shop Price Index Y/Y: 0.8% v 1.3% prior.

- (UK) Apr Lloyds Business Barometer: 42 v 42 prior.

- (DE) GERMANY APR PRELIMINARY CPI M/M: 0.5% V 0.6%E; Y/Y: 2.2% V 2.3%E.

- (EU) ECB's Muller (Estonia, hawk): ECB can probably lower interest rates in June.

- (EU) ECB's Knot (Netherlands): Increasingly confident that inflation is falling toward 2% target, but ECB will need to cautious after the June rate cut.

- (EU) ECB's De Guindos (Spain): Still work to be done on inflation, but we're heading in the right direction.

Levels as of 01:20 ET

- Nikkei 225 +1.0%; ASX 200 +0.2%; Hang Seng +0.1%; Shanghai Composite -0.2%; Kospi +0.6%.

- Equity S&P500 Futures -0.1%; Nasdaq100 flat; Dax flat; FTSE100 +0.1%.

- EUR 1.0702-1.0724; JPY 156.07-156.99; AUD 0.6527-0.6528; NZD 0.5942-0.5981.

- Gold -0.9% at $2,337/oz; Crude Oil -0.3% at $82.36/brl; Copper -0.2% at $4.6690/lb.