Asia-Pacific stocks are trading higher, BOJ not changing range of returns

Bank of Japan’s Kuroda: There is no need to further expand the bond target band

Bank of Japan Governor Haruhiko Kuroda said at a press conference on Wednesday afternoon that there is no further need to extend the control range of the yield curve, according to a Reuters translation.

“We don’t need to expand the margin around our return target,” said Kuroda.

“It’s not long since we decided on our measures in December. It will probably take a little longer for the measures to start having an effect on the recovery of market function,” he said.

The Bank of Japan kept its interest rates at an accommodative rate of -0.1% and made no changes to the margin for controlling the yield curve.

– Jihy Lee

The Chinese stock market will perform best in 2023, Morgan Stanley estimates

Morgan Stanley estimates that the Chinese stock market will come out on top in 2023.

The MSCI China index will reach 80 by the end of the year and the Hang Seng index will rise to 24,500 by the end of the year, said Laura Wang, Morgan Stanley’s Chief China Equity Strategist. This would represent an increase of about 15% from where the market is trading now.

“This basically means that the Chinese stock market will outperform the global stock market for 2023, so now is the time to get back to China,” she noted.

Wang’s recommendation is to buy the shares of large-cap and highly liquid internet names.

The internet sector has “a very high correlation to the overall momentum of China’s consumption pick-up,” especially during the country’s post-Covid recovery journey, she said.

Wang added that many international institutional investors are still quite underweight in these large-cap liquid names.

— Lee Ying Shan

CNBC Pro: ‘Absolutely Unique’: Fund Manager Names 2 Stocks To Play The Semiconductor Sector

Semiconductor stocks are looking good after a rough 2022 – and fund manager Trent Masters says two stocks are well placed to weather the volatility.

Pro subscribers can read more here.

— Zavier Ong

Oil prices are rising on more optimism in China and recovery in demand

Oil prices are supported by further reopened optimism and fuel demand in China, with OPEC predicting Chinese oil demand is on track for an uptick.

Brent crude oil futures rose 0.85% to $86.65 a barrel, while US West Texas Intermediate futures gained 0.91% to $80.91 a barrel.

“China’s oil demand is on track to recover following the country’s recent easing of zero-Covid measures,” OPEC’s monthly oil report said.

It added that China’s oil demand in the first quarter will recover from an annual decline of 0.3 million barrels per day year-on-year in the fourth quarter of 2022 to 0.2 million barrels per day on an annualized basis.

— Lee Ying Shan

Japanese yen weakens after BoJ announces yield curve bandwidth not changing

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

The Japanese yen weakened by 2.04% against the US dollar after the announcement and last stood at 130.94.

“The Japanese economy is expected to continue to grow at a rate above its potential growth rate,” the central bank said in a statement.

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

-Jihye Lee, Lee Ying Shan

Gaming stocks soar after China grants licensing approvals

Hong Kong-listed gaming stocks surged after China granted licensing approvals for 88 games, including NetEase, Tencent Holdings and miHoYo, marking a further easing of Beijing’s crackdown on gaming.

Shares of NetEase jumped as high as 6.81% in early trading, the highest point in more than four months. tencent equities added 0.11%.

—Lee Ying Shan

Bank of Japan likely to increase yield curve control by another 50 basis points: UBS

Japan’s central bank is likely to broaden its 10-year Treasury yield curve control range by another 50 basis points to a range of 1% below and above its 0% target, said Tan Teck Leng, executive director of UBS Global Wealth Management.

“The scenario of a complete shutdown of the YCC is unlikely,” he said on CNBC’s “Squawk Box Asia,” adding that a move would be “uncharacteristic” for the central bank.

“I think the easiest thing for them is to remove the cap, let it find a fair value – but then again it comes down to very big uncertainties, so we think, as a middle ground, they should at least raise it a limit of 1.0%,” he said.

The yield on the 10-year Japanese government bonds broke the upper ceiling of its band for the 5th consecutive session on Wednesday morning ahead of the BOJ’s monetary policy announcement.

Japanese core production orders for November fell more than expected

According to official data, Japanese private sector production orders fell 8.3% in November compared to the previous month.

The drop was significantly greater than Reuters’ expectations of a 0.9% decline. On a year-over-year basis, production orders fell 3.7%.

Private sector machinery figures exclude orders from volatile orders for ships and electric utilities.

— Lee Ying Shan

CNBC Pro: Thinking of Jumping Back into Big Tech? This investor is wary of 2 stocks in particular

CNBC Pro: Morgan Stanley says cheaper EVs are coming – and names the global stocks that will benefit

As electric cars become more popular, Morgan Stanley says there is interest in a new manufacturing technique that could make them more affordable.

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

CNBC Pro subscribers can read more here.

— Ganesha Rao

Stocks end the day mixed, Dow falling nearly 400 points

The Dow Jones Industrial Average index fell at the end of the day as Goldman Sachs stock 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 gained 0.14% to end the day at 11,095.11.

— Tanaya Macheel

Bank of America sees a later onset of the recession

A recession is now unlikely to begin until later in 2023, as consumer spending is stronger than expected and the Federal Reserve eases the intensification of its rate hikes, according to Bank of America.

“We are adjusting the timing of our outlook for a mild recession in the US economy by about a quarter given continued consumer spending driven by strong labor markets, excess savings, falling energy prices and easier financial conditions,” the company said in a press release. a customer note. “That said, we think the headwinds will lead consumers to reduce their spending and increase the savings rate as the year progresses.”

That brings the recession into the second quarter, driven by an investment-induced slowdown that spills over into consumer spending.

After raising the benchmark interest rate by 4.25 percentage points in 2022, the Fed is expected to ease, rising 0.25 percentage points in February. That is expected to be followed by additional quarter-point increases in March and May.

Rate cuts probably won’t come until 2024, the company said.

—Jeff Cox

Goldman Sachs shares plunge on earnings failure

Shares of Goldman Sachs fell 2.4% after the Wall Street investment bank shared fourth-quarter earnings numbers that beat analysts’ expectations on both the top and bottom lines.

The bank reported earnings of $3.32 per share on revenues of $10.59 billion. Consensus estimates called for earnings of $5.48 per share on revenue of $10.83 billion, according to analysts polled by Refinitiv.

Loan loss provisions also came in slightly above expectations.

— Hugh Son, Samantha Subin