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Reports Asia

Asian stock market, economy and companies update (December 20, 2013)

December 20, 2013, Friday, 09:49 GMT | 04:49 EST | 14:19 IST | 16:49 SGT
Contributed by Trade The News


***Observations/Insights***
- Bank of Japan left its key policy setting unchanged, with monetary base set to rise at annual pace of ¥60-70T; Economic assessment also left unchanged for the 4th consecutive meeting. Most notable change was an upgrade to its inflation assessment to "about 1%" from prior "0.5-1.0% range", while the outlook for inflation was set as "likely to rise" vs prior forecast of "to rise gradually". BOJ was also forthright in expecting the economy to be impacted ahead of and after the sales tax hike in April, but did not reveal any plans to adjust policy if its targets are not met. Japanese yen remains under pressure in the wake of the BOJ decision, rising above 104.50, while Nikkei closed marginally higher.
- Shanghai Composite is down sharply falling 2%, which is its 9th consecutive decline. Despite the CNY200B SLO (short-term liquidity operation) overnight, worries about the financial sector have resurfaced, pulling the 1-week Shibor up yet again to its highest level in 6 months. Analysts noted a more aggressive injection will be needed for a more meaningful impact.
- North Korea threatened to attack the South "without warning" in response to what it deemed an anti-Pyongyang provocation when a number of conservative groups and North Korean defectors staged rallies on the 2nd anniversary of the death of Kim Jong Il.


***Speakers/Political/In the Papers***
- (CN) China rejects 545Kt US corn due to unapproved GMO strain - financial press
- (CN) China Ministry of Commerce (MOFCOM): Australia to impose dumping duties on China hot-rolled steel products
- (CN) China Association of Automobile Manufacturers (CAAM): China Jan-Nov auto sales 19.86M units, +13.53% y/y; Auto manufacture 19.99M units, +14.34% y/y
- (CN) China Xiamen City to accelerate FTZ construction - Chinese press
- (CN) China Shenzhen reports 1 new case of H7N9 bird flu, 6th case in Guangzhou Province, 4th case in past 5 days - Chinese press
- (JP) Japan regulators reportedly may ease regulations on public share sales - Japan press
- (JP) Japan govt said to reduce the amount of new bond offerings by ¥1.6T to ¥41.3T in FY14/15 - Nikkei
- (KR) North Korea may launch a strike against South Korea for anti-Pyongyang rallies - Korean press

- (US) Senate Majority Leader Reid (D-NV): Senate likely to vote on Yellen in Jan; Debate to begin Friday
- (MX) S&P raises Mexico Sovereign rating one notch to BBB+ from BBB; Outlook Stable
- (EU) S&P downgrades sovereign rating on Supranational European Union by 1 notch to AA+ from AAA-; Outlook revised to Stable from Negative

***Equities
- (CN) Shanghai Composite closed lower by 2.0%; 9th straight daily decline
- (JP) Nikkei225 closes higher by 0.1%
- (AU) S&P/ASX closes higher by 1.2%


***Economic Data***
- (JP) BANK OF JAPAN (BOJ) POLICY STATEMENT: REITERATES TO INCREASE MONETARY BASE AT ANNUAL PACE OF ¥60-70T (AS EXPECTED)
- (NZ) NEW ZEALAND NOV CREDIT CARD SPENDING M/M: +3.5% V -0.5% PRIOR; Y/Y: 6.9% V 3.3% PRIOR
- (NZ) NEW ZEALAND NOV NET MIGRATION: 2.8K V 3.0K PRIOR
- (NZ) NEW ZEALAND NOV ANZ JOB ADS M/M: -2.1% V 4.4% PRIOR
- (UK) UK DEC GFK CONSUMER CONFIDENCE: -13 V -11E (4-month low)
- (US) NORTH AMERICA NOV SEMI BOOK/BILL RATIO: 1.11 V 1.05 PRIOR (2nd consecutive month above parity)

***Fixed Income/Commodities/Currencies***
- (CN) Daily Shibor fixings: O/N: 3.9270% v 3.8460% prior (5th consecutive rise); 1-week: 7.6540% v 6.4720% prior (5th consecutive rise, multi-week high, highest since June 20th)
- GLD: SPDR Gold Trust ETF daily holdings fall 3.9 tonnes to 808.7 tonnes (lowest since Jan 2009)
- (US) Weekly Fed Balance Sheet Assets Week ending Dec 18th: $3.965T (record high) v $3.950T prior; M1 y/y change: 8.5% v 8.5% w/w; M2 y/y change: 6.4% v 6.4% w/w