Asia-Pacific markets rise; Japan travel stocks gain on border easing reports

The dollar-yen is expected to see more upside as policymakers in Japan are "somewhat conflicted" on whether to intervene to defend its currency, said Claudio Piron, co-head of Asia fixed income and FX at Bofa Securities.

Although the dollar-yen is approaching levels that have warranted action from Japanese officials in the past, Piron said that we're not "quite yet at that point."

"The market will continue to test and probe the upside to dollar-yen until the policymakers show their hand," he said.

— Charmaine Jacob

The probability of the U.S. Federal Reserve hiking interest rates by another 75 basis points at its September meeting moved to 90%, according to the CME Group's FedWatch tracker of fed funds futures bets.

That's up from last week's 82% probability for a three-quarter point hike.

The chance for a 50-basis-point hike now stands at 10%, FedWatch showed.

–Jihye Lee

At least three North Asian refiners have been notified by Saudi Aramco that they will be supplied full contractual volumes of crude in October, Reuters reported, citing people with knowledge of the matter.

In their first reduction in four months, Saudi Arabia has reduced the official selling prices to Asian buyers for the month.

Brent crude futures sank 1.50% to $91.45 per barrel, while U.S. West Texas Intermediate dropped 1.60% to $85.40 per barrel.

— Lee Ying Shan

Travel stocks in Japan popped following local media reports that said the government is planning to resume individual travel, dropping its entry requirement of group tour bookings.

Japan Airlines rose 2.25%, Ana Holdings added 2.6%. Travel agencies HIS and AirTrip rose as much as 2.9% and 8.3% respectively.

The reports added Japan also plans to remove its daily limit on overseas arrivals soon.

— Abigail Ng

The U.S. Department of Commerce plans to publish new regulations related to restricting exports of chipmaking equipment to Chinese factories that produce advanced semiconductors, Reuters reported, citing people familiar with the matter.

The rules will be based on letters sent to KLA, Lam Research and Applied Materials earlier this year, when they were informed that government-issued licenses would be needed to sell such equipment to buyers that make chips with sub-14 nanometer processes.

The new regulations would likely include additional actions against China, sources told Reuters, adding they could be changed and published later than expected.

—Jihye Lee

Economists at the New Zealand Institute for Economic Research downgraded the growth outlook for the country, citing continued high inflation and interest rates.

They now expect the annual gross domestic product for 2022-2023 to grow 2.5%, lower than its previous forecast of 2.9%.

GDP for 2023-2024 is now expected to grow 1%, a steep downgrade from its earlier prediction of a 1.9% increase published in June, while the 2024-2025 forecast was revised to 1.5% from 2.1%.

—Jihye Lee

The British pound has slid against the U.S. dollar over the past year, hitting a 37-year low against the greenback last week — and it could weaken even further, according to analysts.

DZ Bank's Sonja Marten warned that GBP/USD is a currency pair that tends toward large swings, and gave a pretty bearish forecast.

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— Zavier Ong

A unilateral intervention on the Japanese yen from the government is unlikely to be effective, according to National Australia Bank — after officials over the weekend said the government needs to take steps to address the excessive declines in the yen.

"If the [Bank of Japan] really wants to stop JPY's decline, then they need to make changes to their ultra-easy policy, the pressure is building," he wrote in a Monday note. a currency strategist at National Australia Bank

The yen last traded at 142.55 against the dollar.

—Abigail Ng

As fears over the global energy supply came back into focus last week, Goldman highlighted six oil and gas themes which it said looked attractive into the year end.

The investment bank sees total returns of 15% for large-cap stocks under its oil and gas coverage and names six themes to watch into the year end.

CNBC Pro subscribers can read more here.

— Weizhen Tan

Oil futures dropped on demand concerns due to extended Covid measures in parts of China, alongside the potential of continued interest rate hikes globally.

"Oil consumption is particularly sensitive to Covid lockdowns since transportation, the major use of oil, is heavily restricted," Commonwealth Bank of Australia analyst Vivek Dhar wrote in a note, adding China accounted for up to 16% of global oil demand last year.

— Lee Ying Shan