Japanese yen weakens after BoJ announces no change in yield curve range
The Japanese yen weakened against the dollar after the Bank of Japan surprised markets by keeping the yield curve’s tolerance range unchanged.
The Japanese yen fell 2.04% against the US dollar following the announcement and was last traded at 130.94.
“The Japanese economy is forecast to continue growing at a pace above its potential growth rate,” the central bank said in a statement.
The Bank of Japan also left its interest rate unchanged at an ultra-hawkish -0.1% – in line with expectations and keeping the same rate it has held since 2016.
— Jie Li, Li Ying Shan
Gaming stocks jump after China grants license approvals
Gaming shares in Hong Kong rose after China granted license approvals to 88 games, including NetEase, Tencent Holdings and miHoIo, marking a further easing by Beijing against gaming.
Actions from NetEase it jumped as much as 6.81% in early trade, its highest level in more than four months. Tencent shares rose 0.11%.
– Lee Ying Shan
Bank of Japan likely to lift yield curve controls by another 50 basis points: UBS
Japan’s central bank is likely to widen its 10-year Treasury yield curve control range by another 50 basis points to a range of 1% below and above its 0% target, UBS Global Wealth Management CEO Tan Teck Leng said.
“The scenario of leaving the ICC entirely is unlikely,” he told CNBC’s “Squawk Box Asia,” adding that such a move would be “uncharacteristic” of the central bank.
“I think the easiest thing for them to do is remove the cap, let it find a fair value – but again there are very big uncertainties, which is why we think, as a middle ground, they need to raise it at least to the 1.0% limit,” he said .
Yield on 10-years of Japanese government bonds breached the upper end of its range for the fifth straight session on Wednesday morning ahead of the BOJ’s monetary policy announcement.
Japan’s core manufacturing orders for November fell more than expected
According to official data, Japanese manufacturing orders in the private sector in November fell by 8.3% compared to the previous month.
The drop was well above Reuters expectations for a 0.9 percent decline. On an annual basis, manufacturing orders fell by 3.7%.
Data on machinery in the private sector excludes orders from volatile ships and power companies.
— Lee Ying Shan
CNBC Pro: Thinking about getting back into Big Tech? This investor is particularly cautious with 2 stocks
CNBC Pro: Morgan Stanley says cheaper electric vehicles are coming — and names the global stocks that will benefit
As electric cars become more popular, a new manufacturing technique that could make them more affordable is generating interest, according to Morgan Stanley.
Some automakers are outsourcing a process that could benefit three of Asia’s leading parts suppliers, a Wall Street bank said.
CNBC Pro subscribers can read more here.
— Ganesh Rao
Stocks end the day mixed, with the Dow falling nearly 400 points
The Dow Jones Industrial Average fell for the rest of the day, as shares of Goldman Sachs 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.
— Tanaia Macheel
Bank of America sees a later onset of the recession
A recession likely won’t start now until later in 2023, as spending is stronger than expected and the Federal Reserve eases the pace of interest rate hikes, according to Bank of America.
“We are shifting the timing of our outlook for a mild recession in the U.S. economy by about one quarter given the durability of consumer spending due to strong labor markets, excess savings, falling energy prices and easier financial conditions,” the company said in a client note. “Even so, we think headwinds will lead consumers to cut back on spending and increase their savings rate as the year progresses.”
That leads to a recession in the second quarter, driven by an investment-driven slowdown that leaks into consumer spending.
After raising its benchmark borrowing rate by 4.25 percentage points in 2022, the Fed is expected to pull back, with a 0.25 percentage point increase in February. This is forecast to be followed by a further quarter-point increase in March and May.
A rate cut likely won’t come until 2024, the company said.
— Jeff Cox
Goldman Sachs shares fall on earnings miss
Shares of Goldman Sachs fell 2.4% after the Wall Street investment bank shared fourth-quarter earnings results that missed analysts’ expectations on both the top and bottom lines.
The bank reported earnings of $3.32 per share on $10.59 billion in revenue. Consensus estimates called for earnings of $5.48 a share on revenue of $10.83 billion, according to analysts polled by Refinitiv.
Provisions for loan losses were also slightly above expectations.
— Hugh Son, Samantha Subin