Asian markets are mixed as the Bank of Japan leaves monetary policy unchanged in the final meeting of 2023

2 hours ago

Australia’s central bank considered raising interest rates in December but paused due to limited data: minutes

The Reserve Bank of Australia considered a 25 basis point rate hike in December but ultimately decided to keep rates at 4.35%, central bank minutes showed.

The RBA said the case for a rate hike was linked to expectations that inflation would remain above its 2% target for an extended period and that there were risks that this period could be extended.

In addition, underlying inflation was found to be higher in Australia than in several other countries.

On the other hand, the RBA’s argument for maintaining interest rates was due to weak growth in consumer demand, with members also noting that the pace of disinflation had accelerated in some other countries in recent months. “If this were replicated in Australia it would be helpful in bringing inflation back to target.”

—Lim Hui Jie

2 hours ago

Nippon Steel plunges nearly 6% after deal to buy US Steel

Japan’s Nippon Steel fell 5.8% to 3,052 yen in the first hour of trading after agreeing late Monday to buy US Steel for $14.9 billion in cash.

Nippon Steel is buying US Steel for $55 per share, a nearly 40% premium to US Steel’s last closing price of $39.33 on Friday.

The acquisition of US Steel will enable Nippon Steel to achieve global crude steel capacity of 100 million tons.

The Nikkei 225 index was flat, while the broader Topix fell 0.3% as investors awaited the Bank of Japan’s interest rate decision later in the day.

—Shreyashi Sanyal

3 hours ago

The yen rose for the third day in a row ahead of the Bank of Japan’s interest rate decision

The Japanese yen has lost significantly in value against the dollar in 2022.

Stanislav Kogiku | SOPA images | LightRocket | Getty Images

The Japanese yen strengthened against the dollar and traded in the 142 area for the third day in a row.

Investors are preparing for the Bank of Japan’s final interest rate decision this year, with the central bank expected to stick with its negative interest rate policy, according to a Portal poll of economists.

The BOJ’s stance on its yield curve control policy is also being closely watched.

“There is no immediate urgency for the Bank of Japan (BOJ) to change its accommodative stance, but our base case is that it will end the current negative interest rate policy in April 2024, coinciding with the annual wage negotiations,” said Aadish Kumar, international economist at T. Rowe Price, wrote in a customer note.

“The other important decision facing the Bank of Japan is when and how to lift its yield curve control (YCC) policy. While this could happen as early as December this year, the YCC policy has already been gradually scaled back. “The parameters of the 10-year yield cap will be relaxed to such an extent that it will become irrelevant,” Kumar added.

Japan’s Nikkei 225 headed for a flat open, with the Chicago futures contract at 32,810 and its Osaka counterpart at 32,740, while the index’s last close was at 32,758.98.

—Shreyashi Sanyal

7 hours ago

Oil prices rise due to disruption to shipping in the Red Sea

Oil prices rose more than 1% on Monday as attacks on ships in the Red Sea caused shipping disruptions.

The January West Texas Intermediate contract rose $1.04, or 1.46%, to close at $72.47 a barrel. The February Brent contract rose $1.40, or 1.83%, to close at $77.95 a barrel.

BP said Monday it would suspend shipping through the Suez Canal in response to attacks by militants in Yemen on ships in the Red Sea.

–Spencer Kimball

12 hours ago

Fed Chairman Goolsbee says he was “confused” by the market reaction

Chicago Fed President Austan Goolsbee said on CNBC’s “Squawk Box” that the market may have misinterpreted the central bank’s update from last week, when the Dow jumped to a record high.

“It doesn’t matter what you say or what the chairman says. It depends on what they heard and what they wanted to hear,” Goolsbee said. “I was a bit confused – was the market just assuming what we expected it to do?”

The Fed chairman also rejected the idea that the Fed is actively planning a series of interest rate cuts.

“We do not debate speculatively about specific policies about the future. We are voting on this meeting,” he said.

–Jesse Pound

7 hours ago

Real estate and utilities underperform the S&P 500

Real estate and utilities underperformed on Monday. The sectors were the only two trading in negative territory. Real estate fell 0.8% while utilities fell 0.6%.

Kimco Realty and Boston Properties were each down more than 1%. Prologis lost 1.2%.

Exelon shares fell 3%, while PG&E fell more than 2%. Pinnacle West Capital fell 1.5%.

—Sarah Min

8 hours ago

Tech stocks could face more pressure in 2024, Bernstein says

Tech stocks could face a bigger squeeze in 2024, according to Toni Sacconaghi, senior research analyst at Bernstein.

“We find it difficult to recommend an overweight in technology for 2024,” the analyst wrote in a note on Monday. “The technology sector has outperformed by more than 2,500 basis points twice in the last 20 years (2009 and 2020), and both times the next year’s performance was in line with that of the broader market.”

Sacconaghi said that while the firm finds it difficult to remain overweight on technology stocks, Bernstein is wary of switching to underweight because of the sector’s strong momentum, falling interest rates and overall outperformance, which make it “statistically difficult.” and economically punitive) to actively “bet” against the technology.

—Brian Evans