Asian markets are poised to plunge after Wall Street posted the worst week of 2023; The Governor of the Bank of Japan speaks to the Japanese Senate

The People’s Bank of China maintained its dovish tone Quarterly reportIt affirmed its current position, which was deemed appropriate to support economic growth and stability.

The central bank reiterated its support for a cross-cyclical adjustment to boost demand and provide stronger support for the economy.

It also reiterated its pledge to maintain adequate liquidity and credit growth while maintaining money supply and social finance growth at a pace similar to its nominal GDP.

The People’s Bank of China added that the required cuts in the reserve ratio last year were one of the tools the central bank used to support lending, without elaborating.

– Jihe Lee

Shares of South Korean chipmakers extended their decline on Monday.

Major chipmakers such as Samsung and SK Hynix saw declines of 1.63% and 1.54%, respectively, while LG Electronics saw a smaller decline of 1.32%. The Kospi Index led losses in Asia overall, trading down 1.46%.

This comes after Reuters reported on Friday that the US is likely to impose a cap on the level of chips South Korean companies make in China.

Reuters quoted US Undersecretary of Commerce for Industry and Security Alan Estevez, who said that “what that would probably be is a cap to the levels they can grow to in China” when asked what would happen after the US government’s waiver of rules on chipmakers expires. In China.

Other major chipmakers also saw losses on Monday, with Taiwanese chipmaker Hon Hai Precision Industry (also known as Foxconn) down 1.94% and Taiwanese Semiconductor Industry down 1.35%.

– Lim Hwi Ji, Ji Hye Lee

Despite the US central bank’s efforts to tighten financial conditions, “the market has gone too far,” according to Seema Shah, chief global strategist at Principal Global Investors,

The strategist told CNBC how the Fed might react and when it will cut interest rates, which could boost stock markets.

CNBC Pro subscribers can read more here.

Cleveland Fed President Loretta Mester said Friday that interest rates need to go even higher for inflation to fall.

“My view is that we’re going to have to raise interest rates above 5%,” she told CNBC correspondent Steve Laiseman during an interview on “Squawk Box.” “We’ll quantify the above. It will depend on how the economy evolves over time. But I think we have to be somewhat above 5% and stay there for a while in order to get inflation on a sustainable downward trajectory to 2%.”

Meester recently made news when she revealed that she was among a small group of Federal Reserve officials on Jan-Feb 31. 1 Federal Open Market Committee, wanted to raise the interest rate by half a percentage point instead of the quarter-point move approved by the committee.

– Jeff Cox

Missing Chinese investment banker Bao Fan is cooperating with a government investigation, his company China Renaissance said in a statement on Sunday.

“The board has learned that Mr. Bao is currently cooperating with an investigation being conducted by some authorities in the People’s Republic of China,” the company said, noting that its business operations remain normal.

Shares of Hong Kong-listed China Renaissance have fallen 29% since the company said on February 16 that it was unable to access Bao. He is the controlling shareholder of the company, CEO and founder, among other roles.

– Evelyn Cheng

Regional readings of Japan’s PMI, Industrial Production and Australia’s GDP will be some of the most important economic events this week.

New Zealand is scheduled to report its fourth quarter retail sales on Monday while Taiwan celebrates Peace Memorial Day through Tuesday.

On Tuesday, Japan is due to report its industrial production and retail sales while Australia is to report its current account for the fourth quarter.

India will also announce its fourth-quarter gross domestic product on Tuesday. Overnight, the US Consumer Confidence for February will also be released.

South Korea market will be closed on March 1 to celebrate the Independence Movement Day.

On Wednesday, the Chinese National Bureau of Statistics will release its government reading of the PMI after it showed a return to growth of 50.1 in January.

Australia will release its inflation and gross domestic product reading for the fourth quarter. Economists polled by Reuters expect to see growth of a seasonally adjusted 2.8% year on year.

Indonesia will also release its consumer price index for February, which is expected to have risen to 5.42% from a previous reading of 5.28%, according to a Reuters poll.

On Thursday, trade data for the fourth quarter will be released from New Zealand as well as South Korea’s industrial production and retail sales. The S&P Global Manufacturing PMI for South Korea is also scheduled to be released.

Japan’s unemployment rate for January is forecast on Friday at 2.5% for January, according to a Reuters poll. The Tokyo CPI for all items except fresh food is expected to have increased 3.3% for the month of January.

– Jihe Lee

The market is currently seeing the effects of “a lot of good news at once,” according to Baird analyst Ross Mayfield. With inflation still rising and the Federal Reserve expected to continue raising interest rates, Mayfield advises investors to “control what happens.” [they] can control.”

“First, automate things: dollar cost averaging (investing across regularly scheduled periods) is a great way to spot outperformance in volatile/sideways markets,” Mayfield wrote in a note on Friday.

“Second, revisit your allocation to make sure you’re well diversified and planned.”

– Hakyung Kim

US stocks closed lower on Friday, capping their worst week of 2023.

The Dow Jones Industrial Average fell 336 points, or 1.0%. The S&P 500 and Nasdaq Composite fell 1.0% and 1.7%, respectively. The Dow Jones fell as much as 510 points, or 1.54%, earlier in the trading session.

– Hakyung Kim