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Asian stock market, economy and companies update (June 25, 2010)

Contributed by Trade The News

By Trade The News

- Asian equity markets are lower across the board in the week's last trading session following a modest bounce overnight, tracking the final-hour selloff in US indices. Late in Tokyo, Nikkei225 is down 2.2%, while S&P/ASX and the Taiex are off by 1.5%. Korea's Kospi and Shanghai Composite are in the red as well, declining a more moderate 0.7%. With poor quarter performance in the consumer names NKE and BBBY driving Wall Street weakness on Thursday, Friday appears to be more mixed on strong afterhours earnings report out of Oracle, as front-month S&Ps are still up a marginal 0.1% at 1,071.

- In notable economic data, Japan took a step forward in pulling out of its deflationary spiral after a setback in the prior month that saw the first decline since October 2009. National and Core Tokyo CPI remained in the negative but registered a 1-yr and a multi-yr high respectively. In New Zealand, May trade balance missed estimates but also registered its 1-yr best level.

SPEAKERS/PRESS
- CHINA: PBoC looked to ease some of the international pressure for currency reform going into the Toronto G20 meeting this weekend, setting Yuan midpoint rate at a new 5-yr high after 2 days of lower midpoints. Commodity majors and S&P futures were briefly bid higher on stronger Yuan before a subsequent retreat. Separately, President Obama said he intends to discuss currency with Pres Hu at the G20, while a press report in China citing a survey of Beijing companies saw little in terms of expectations for a substantially stronger CNY.

- AUSTRALIA: Incoming PM Gillard said she would make it a priority to address questions on super-profits mining tax before DECLINING to comment on whether the 40% super-profit levy would be amended. Renewed uncertainty saw the mining sector shares underperform all others after relative strength in the prior session. Dep PM/Treasurer Swan reiterated the new cabinet remains committed to enacting profits based mining bill, but genuinely want negotiations with the industry. Elsewhere, West Australia Premier Barnett said the mining tax resolution may take as long as 6 months, and the mining chief of Rio Tinto Walsh noted that despite the leadership change, Australia investment environment remains murky.

EQUITIES
- Toyota saw mixed reports on progress over labor action in China, as local press said Guangzhou parts plant will not restart before Jun 28th after yesterday's note that output returned to full capacity. Separately, a press report saw Toyota partnering with Fuji Heavy to deliver small sedans for sale after its brand was compromised by recent recalls. Premium retailer Takashimaya said it may report Q1 of profit ?3B, +40% y/y. In Korea, STX Shipbuilding was awarded a $360M vessel contract, while Hynix noted that the impact of a DRAM price fixing fine by US is likely to be minimal.

CURRENCIES/FIXED INCOME/COMMODITIES
- European and commodity majors traded predominantly sideways after mixed US-session action. EUR/USD retreated to 1.23 from 1.2340, GBP/USD remained supported by 1.49 after an 80-pip drop, and USD/CHF returned above 1.10 after falling below that handle to a 6-month low in the US. In commodity FX, AUD/USD retreated to 0.8610 despite the strong Yuan setting as FX market uncertainty over mining outweighed the fickle PBoC action. USD/CAD traded in narrow range above 1.04, while NZD/USD fell about 50 pips to 0.7030. Japanese Yen was generally firmer in line with risk aversion in equities, with a streak of strength also seen after the better than expected CPI data. In commodities, front-month crude was down marginally to $76.20/brl, while spot gold traded in $1,241-46/oz range despite further appetite for SPDR Gold Trust ETF holdings rising to a new record of 1,316.2 metric tons.

ECONOMIC DATA
- (KS) SOUTH KOREA JUN CONSUMER CONFIDENCE: 112.0 V 111.0 PRIOR
- (NZ) New Zealand MAY Trade Balance (NZ$): 814M v 850Me (1-yr high); Imports: 3.4B v 3.4Be; Exports: 4.2B v 4.2Be (multi-year high)
- (JP) Japan May National CPI y/y: -0.9% v -1.1%e (highest since Apr 2009); National Core: -1.2% v -1.3%e; JUN Tokyo Core CPI y/y: -1.3% v -1.4%e (1-yr high)
- (PH) Philippines APR Trade Balance: -$846M v -$362M prior (biggest deficit since Jul 2008); Total Imports y/y: 45.3% v 38.9% prior
- (CH) CHINA MAY INDUSTRIAL PROFITS YTD Y/Y: 81.6% V 119.7% PRIOR