An employee works at the Tokyo Stock Exchange (TSE), operated by Japan Exchange Group Inc. (JPX), in Tokyo, Japan, on Thursday, Jan. 13, 2022.
Toru Hanai | Bloomberg via Getty Images
South Korea’s Kospi dipped 0.86% to 2,218.09 and the Kosdaq was 1.47% lower at 680.44. The MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.87%.
U.S. stocks fell as Treasury yields climbed on Wednesday stateside, and the benchmark 10-year yield touched 4.174% on Thursday in Asia, the highest level since July 23, 2008.
The Nasdaq Composite shed 0.85% to close at 10,680.51, while the S&P 500 declined 0.67% to 3,695.16. The Dow Jones Industrial Average lost 99.99 points, or 0.33%, to finish the day at 30,423.81.
— CNBC’s Chery Kang, Jesse Pound and Tanaya Macheel contributed to this report.
Japanese yen weakens past 150 against greenback, BOJ announces bond-buying operations
Hong Kong-listed airlines briefly spike on report China is debating reducing quarantine
Hong Kong-listed shares of some Chinese airlines briefly spiked following a Bloomberg report that Chinese officials are debating reducing the quarantine period for inbound travelers.
Shortly after the report, China Southern Airlines was up about 3%, Air China was roughly 2% higher and China Eastern Airlines rose more than 1%. The stocks have since pared most of their gains.
In Japan, ANA Holdings also gained 1.54% and Japan Airlines traded 1.36% higher.
Meanwhile, shares of Cathay Pacific were last more than 2% lower and Korean airlines and travel-related stocks continued to trade roughly 2% lower.
DoubleLine Capital’s Gundlach says Treasury yields may peak before the end of the year
DoubleLine Capital CEO Jeffrey Gundlach said U.S. Treasury yields “may well be peaking between now and year-end.”
“Note how the long end is flat,” he said in a tweet, following a list of current yield levels. “Sign of yield increase exhaustion.”
The 10-year Treasury yield ticked up as high as 4.154% after reaching the highest level since July 2008 during the U.S. markets session. It was last at 4.1485%. The 2-year Treasury note last traded at 4.5695% while the 5-year note traded at 4.3712%.
Oil prices climb in spite of release of U.S. strategic oil supplies
Oil prices rallied on Thursday as markets shrugged off announcements that the United States will release more crude from its reserves.
“Upward pressure though is coming from OPEC+ supply cuts and imminent EU sanctions on seaborne imports of Russian oil,” Vivek Dhar from Commonwealth Bank of Australia wrote in a note.
He added that the 15 million-barrel release of strategic U.S. oil stockpiles was already expected and is “too small to impact the market.”
— Lee Ying Shan
Australia’s unemployment rate steady at 3.5%
The unemployment rate in Australia for September was unchanged from the previous month at 3.5%, according to the Australian Bureau of Statistics – in line with expectations of analysts in a Reuters poll.
Diana Mousina, senior economist at AMP Capital, said she expects the unemployment rate to stay in current levels in the near-term before rising next year.
“Employment growth would need to slow down significantly to see a rise in the unemployment rate in the short-term,” she wrote in a note.
— Abigail Ng
CNBC Pro: Taking cover in bonds ahead of a recession? BlackRock says that’s an ‘obsolete’ playbook
Recession fears are roiling markets, but the typical playbook of taking cover in sovereign bonds is “obsolete,” says BlackRock.
“In this environment, bond vigilantes are back and heralding term premium’s return,” BlackRock said, adding that it’s underweight on government bonds.
The asset manager says that investors can still buy other types of bonds, however.
— Weizhen Tan
China keeps benchmark lending rates unchanged
China’s central bank left its benchmark lending rates unchanged for a second consecutive month, matching expectations by most analysts in a Reuters poll.
The People’s Bank of China said it would hold the one-year loan prime rate at 3.65%, and the five-year rate at 4.30%, according to an announcement.
The PBOC earlier in the week also announced it would hold its medium-term policy loan rates steady.
Tech stocks in Hong Kong plunge, drag down wider index
Hong Kong-listed shares of technology companies dropped sharply in early trade, with the Hang Seng Tech index down 4.6% and dragging down the wider Hang Seng index.
— Abigail Ng
Japanese yen nears 150 against the U.S. dollar
The Japanese yen edged close to 150 against the greenback, at levels not seen since August 1990. It was last at 149.94 per dollar.
The yen hovered around 159.8 levels in April 1990, and last breached 160-levels in December 1986.
Japanese officials commented against further weakening of the currency Thursday, with Finance Minister Shunichi Suzuki saying the government will take “appropriate steps against excess volatility,” Reuters reported.
“Recent rapid and one-sided yen declines are undesirable. We absolutely cannot tolerate excessively volatile moves driven by speculative trading,” he said.
CNBC Pro: Chip stocks have been down all year — but one looks ‘really inviting’, says fund manager
Semiconductor stocks have been beaten down this year, but investors with a longer-term view on the importance of chips to secular trends such as 5G, electrification and artificial intelligence could look to buy the dip.
Hedge fund manager David Neuhauser shares one chip stock he likes.
Pro subscribers can read more here.
— Zavier Ong
Japan’s trade deficit for September narrows slightly
Japan’s trade deficit for September was at 2.09 trillion yen ($13.97 billion), according to provisional figures from the government – missing estimated figures by a Reuters poll expecting a deficit of 2.17 trillion yen.
The country reported a trade deficit of 2.82 trillion yen in August.
Exports for the month of September were at 8.82 trillion yen, while imports were at 10.9 trillion yen.
Japan’s trade deficit for the first half of fiscal year 2022-2023 is the largest on record, the finance ministry was quoted as saying in a Reuters report.
Japan’s fiscal year starts in April, and the deficit for the April to September period was 11 trillion yen, data showed.
— Abigail Ng
China’s offshore yuan hits record low overnight
The offshore yuan touched a record low of 7.2745 against the dollar overnight as the Communist Party of China’s National Congress continues. The offshore yuan last changed hands at 7.2708 per dollar.
“A very large uncertainty is when the Chinese government eases its strict zero-Covid policy,” according to a note by the Commonwealth Bank of Australia.
Analysts wrote that the strict measures are seen to remain until early 2023.
“The restrictions will prolong the period of weakness in China’s economy and keep AUD/USD and NZD/USD undervalued for longer and push USD/CNH up to 7.30,” the note said.
— Abigail Ng
Investors weigh rising Treasury yields
Investors monitored Treasury yields for recession signals Wednesday even as a stronger-than-expected start to earnings season has helped buoy markets this week.
Of the 64 companies in the S&P 500 that have posted third-quarter results through Wednesday, 69.4% have beaten expectations, according to FactSet data.
Still, surging Treasury yields have helped stocks get back to “real life” on Wednesday, according to comments from LPL Financial’s Quincy Krosby. On Wednesday, the yield on the 10-year Treasury rose as high as 4.136%, or its highest level since July 2008.
“A steady 3-month/10-year inversion would reinforce the Treasury market’s signal that a recession is in the offing, since it has the reputation of predicting a serious economic downturn,” Krosby wrote.
— Sarah Min