Asia markets fall as New Zealand hikes rates to 14-year high; Hong Kong releases budget

This is CNBC's live blog covering Asia-Pacific markets.

Auckland, New Zealand.
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Asia-Pacific markets were lower on Wednesday after Wall Street's sharp losses overnight, and New Zealand's central bank continued to hike its benchmark interest rate.

The Reserve Bank of New Zealand hiked rates by 50 basis points to 4.75%, the highest in over 14 years, to tame inflation. The S&P/NZX 50 Index fell fractionally to close at 11,794.2 and the New Zealand dollar gained 0.21% to stand at 0.6226 against the U.S. dollar.

In Australia, the S&P/ASX 200 closed 0.3% lower at 7,314.5 as nation saw its wage price index for the fourth quarter of 2022 come in lower than estimates.

Japan's Nikkei 225 finished 1.34% lower at 27,104.32 as the nation's producer price index rose 1.6% on an annualized basis, while the Topix dropped 1.11% to end the day at 1975.25.

In South Korea, the Kospi shed 1.68% to end the day at 2,417.68 and the Kosdaq finished 1.88% down at 778.51.

In mainland China, the Shenzhen Component closed 0.57% lower at 11,900.12, while the Shanghai Composite dropped 0.43% to finish at 3,292.16

The Hang Seng index was 0.46% lower in its final hour of trade, while the Hang Seng Tech index fell 1.56% as investors digested Hong Kong's budget. Financial Secretary Paul Chan said the economy shrank by 3.5% in 2022.

Overnight, on Wall Street, the Dow Jones Industrial Average shed 2.06% and the S&P 500 dropped 2%, marking the worst downturn for both indexes since Dec. 15. The tech-heavy Nasdaq Composite fell 2.50%.

— CNBC's Kim Hakyung and Fred Imbert contributed to this report.

Highly skilled digital workers in Asia Pacific earn up to 65% more: report

Workers with advanced digital skills earn up to 65% higher salaries than workers who do not use digital skills at all, according to a report by workplace consultancy Gallup and Amazon Web Services.

Advanced digital skills refer to skills in fields such as software development, cloud infrastructure and machine learning, said the Asia Pacific 2023 Digital Skills Report.

These workers, which include those with advanced skills as well as more basic or intermediate digital skills such as emailing or word processing, add an estimated $4.7 trillion to the region's annual gross domestic product.

"APAC organizations that employ workers with advanced digital skills report annual revenues that are 150% higher than those that employ workers with only basic digital skills," the report said.

Read more on the report here.

– Sheila Chiang

Bank of Korea expected to pause rate hikes Thursday

South Korea's central bank is expected to hold its interest rate at 3.5% Thursday, according to a Reuters poll of 41 economists.

The Bank of Korea would be one of the first central bank in the region to halt its hiking cycle compared to its global peers, with the exception of Japan and China – after the Reserve Bank of New Zealand raised its cash rates by 50 basis points on Wednesday.

Australia's central bank lifted its rates by 25 basis points earlier this month.

The South Korean won weakened marginally on Wednesday, trading at 1,305.17 against the U.S. dollar.

— Lim Hui Jie

More regulatory scrutiny could impact Coinbase's business: analyst

Clear rules for crypto companies will lead to greater institutional adoption, analyst says
Clear rules for crypto firms may lead to greater institutional adoption: Analyst

Increased regulatory scrutiny could impact Coinbase's business, John Todaro, vice president of cryptoasset and blockchain research firm Needham told CNBC's "Street Signs Asia" on Wednesday.

Todaro's comments come after Coinbase CEO Brian Armstrong recently said increased scrutiny "will ultimately benefit" the company after reporting a lower-than-expected revenue on Tuesday.

"You have to take Brian Armstrong's words a little bit with a grain of salt, because if that regulation comes up to strength, it could impact revenue and verticals," he said.

"If you get clear rules of the road for these different crypto companies, that would bring greater institutional adoption so institutions aren't sidelined from the space waiting for that regulatory clarity, at least here in the U.S.," said Todaro.

Todaro urged the industry to take Armstrong's words "with a grain of salt" because "if that regulation comes up to strength, it could impact Coinbase's revenue and verticals", adding that another crypto exchange Kraken had to cease its U.S. staking business due to an enforcement action by the SEC.

Prices of Bitcoin fell 3.47% and last traded at $24,070.88 and Ether also fell 3.43$ to $1,640.07, according to CoinMetrics.

– Sheila Chiang

Hong Kong's Paul Chan says HKEX exploring stock trade during severe weather

Hong Kong's financial secretary Paul Chan said that HKEX will study a "series of proposals" to improve trading conditions in the city, including measures to allow stock trading during severe weather.

"The HKEX will also study a series of proposals.. which include exploring arrangements for maintaining operation of the market under inclement weathers," he said, according to excerpts of his speech.

The CEO of Hong Kong Exchanges and Clearing told CNBC in November that the bourse is "constantly" looking to review the protocol of halting trade when authorities issue a typhoon warning of Signal 8 or highter.

– Jihye Lee

Hong Kong economy to see a rebound of 3.5% to 5.5% in 2023, Financial Secretary says

Hong Kong's economy is expected to see a rebound of 3.5% to 5.5% in 2023, after it saw a 3.5% contraction in gross domestic product for the whole of 2022.

Financial Secretary Paul Chan said the "external environment deteriorated markedly" in 2022, adding Hong Kong's total exports of goods posted a decline of 13.9% in real terms last year.

This was due to "moderated growth" across major economies, decelerated growth in manufacturing and trading activities in Asia, as well as continued disruptions to truck movements between Hong Kong and mainland China caused by the Covid-19 pandemic, he said.

With cost pressures expected to increase alongside economic recovery, Chan forecasted hat the underlying inflation rate and the headline inflation rate will rise to 2.5 per cent and 2.9 per cent respectively this year.

Still, he noted that in the medium to long term, Hong Kong's economy will see "abundant opportunities."

The Hong Kong economy is expected to grow by an average of 3.7% per annum in real terms from 2024 to 2027.

— Lim Hui Jie

New Zealand raises interest rates by 50 basis points to 4.75%

New Zealand's central bank has raised interest rates by 50 basis points from 4.25% to 4.75, in line with economists expectations.

In a release, the Reserve Bank of New Zealand indicated that interest rates could still rise, to ensure inflation returns to its target range over the medium term.

"While there are early signs of price pressure easing, core consumer price inflation remains too high, employment is still beyond its maximum sustainable level, and near-term inflation expectations remain elevated," the bank said.

Following the announcement, the New Zealand dollar strengthened against the U.S. dollar to trade at 0.622.

— Lim Hui Jie

Hybe shares climb over 4% even as 2022 profit slips over 75%

Shares of K-pop agency Hybe rose 4% despite the company reporting a 75.9% drop in full-year profit for 2022 compared to a year ago.

Hybe reported a net profit of 33.9 billion won ($26 million), lower than the 140.8 billion recorded in 2021 – while its full-year total revenue grew to 1.78 trillion won, a 41.6% jump from its revenue of 1.26 trillion in 2021.

The entertainment agency recently announced to acquire a 14.8% stake in rival SM Entertainment from SM's founder and chief producer Lee Soo Man.

Lee made the move after he reportedly took legal action to stop South Korean internet company Kakao from increasing its stake in SM to 9.05%.

— Lim Hui Jie

Return of Chinese tourists won't have impact on Singapore Airlines until Q2: DBS analyst

Singapore Airlines may see a meaningful rebound in China travel only in the second quarter: Analyst
SIA could only see 'meaningful' rebound of China tourism in Q2 2023, says DBS

China's reopening will eventually bring more Chinese tourists but Singapore Airlines won't feel the impact until the second quarter of 2023, according to DBS Group research analyst Jason Sum.

His comments came as SIA posted a record quarterly operating profit of $755 million Singapore dollars ($563 million) for the October to December quarter, up more than 11% from the previous quarter.

Speaking to CNBC's "Squawk Box Asia," Sum said it's "not feasible" for SIA to rapidly add flights to China, due to the Covid-19 situation being "slightly unstable" in the country.

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He acknowledged that the situation is stabilizing, but said "it is too early at this juncture to rapidly add flights because there will be some hesitation from consumers to travel to China, until things start to look much better."

In a report Wednesday, Sum maintains his "buy" call and 12-month target price of $6.80 on SIA. He explained that he expects "solid forward earnings momentum" from the airline.

— Lim Hui Jie

Commonwealth Bank: Australia's wage growth shows there is 'no wage-price spiral'

Australia's wage price index released earlier on Wednesday showed the economy is not facing a wage‑price spiral, Commonwealth Bank of Australia's Gareth Aird said in a note.

"Firms that have used bonuses and other one off payments to reward, retain and attract workers, rather than upwardly adjusting base pay have not had a permanent upward adjustment in input costs," he said.

A wage-price spiral refers to the phenomenon of price increases as a result of higher wages. Australia's inflation print stood at 7.8% in December, recent data showed.

"As demand in the economy slows these payments can be wound back," Aird wrote.

– Jihye Lee 

Bank of Japan member stands by monetary policy easing for now

Bank of Japan board member Naoki Tamura said that it is appropriate for the central bank to maintain its current ultra-dovish monetary policy stance, according to a speech.

"At this point, I think it is appropriate to continue with monetary easing," he said.

He added at some point in the future, it would be "necessary to review" the framework as well as its inflation target "to reassess the balance between the effects and side effects of [the] policy," he said.

His comments come as the yield on the 10-year Japanese government bond exceeded its upper ceiling of its tolerance range and stood at 0.505% Tuesday morning.

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– Jihye Lee

CNBC Pro: These electric vehicle ETFs are up around 20% this year, and analysts see major upside ahead

The number of EV-focused exchange-traded funds have grown as interest in the industry booms.

CNBC Pro has attempted to narrow down the list and has identified ETFs that analysts expect to rise by more than 30% over the next year.

CNBC Pro subscribers can read more here about the 12 ETFs.

— Ganesh Rao

‘Insure against the worst’: Goldman picks stocks for a soft — and hard — economic landing

Investors are on edge after U.S. stocks fell for three consecutive weeks, signaling the possibility of higher interest rates for longer than expected.

The yield on the 6-month and 1-year Treasury bonds closed at 5% on Friday, thanks to several economic data releases last week that pointed toward a strong U.S. economy.

A rise in bond yields leads to increased borrowing costs for companies, which adds downward pressure on stocks.

Despite this challenging environment, Goldman Sachs remains optimistic and expects a "soft-landing" for the U.S. economy. In this scenario, inflation is controlled with a mild recession at most.

To capture the upside in a soft-landing scenario, the Wall Street bank said that investors should own stocks that can benefit from a decelerating inflation environment.

CNBC Pro subscribers can read more here.

— Ganesh Rao

Australia's wage price index misses expectations

Australia's wage price index rose by 3.3%, missing estimates in a Reuters poll, which expected to see growth of 3.5% on an annualized basis.

Compared to the previous quarter, the wage price index rose by 0.8%, also below expectations for a 1% growth.

Private sector's wage prices gained by 0.8% and the public sector rose by 0.7%, the release said.

– Jihye Lee

Singapore Airlines posts record operating profit for fourth quarter of 2022

Singapore Airlines reported a record operating profit of $755 million for the period between October - December 2022, 11.4% higher than the previous quarter.

In a business update, SIA reported revenue for the quarter came in at $4.85 billion, 8% higher than the quarter before.

Net profit stood at $628 million, compared with $556.5 million the previous quarter.

SIA said group passenger capacity reached 80% of pre-Covid levels, and expects strong momentum in forward passenger sales for the first quarter of 2023.

But it also warned that weaker global demand and increased capacity will weigh on its air freight segment.

— Lim Hui Jie

CNBC Pro: Wall Street loves Alibaba right now. Here's what to expect from the tech giant's earnings

Alibaba is a Wall Street favorite when it comes to playing the Chinese tech sector and the country's Covid-19 reopening.

It is rated "buy" by almost all analysts — 93% — covering it, according to FactSet. They give it average potential upside of 43%.

The tech giant is due to report its earnings for the December quarter on Thursday. Here's what Wall Street is expecting.

— Zavier Ong

CNBC Pro: Buffett-backed BYD and more: Analysts name top 'climate stocks,' giving one 100% upside

Energy storage and the future of transport are two of the "most attractive" climate themes to invest in right now, according to HSBC analysts.

The bank named buy-rated stocks under both of these themes which have among the highest upside to its price targets.

CNBC Pro subscribers can read more here.

— Weizhen Tan

Japan's producer prices index rises 1.6% in January

Japan's producer prices index rose 1.6% on an annualized basis, slightly higher than December's figure of 1.5%.

This puts the index at 107.4, slightly lower than 107.7 in December, and is the first monthly drop since August 2022.

The PPI measures the average movements of prices received by domestic producers for goods and services sold.

The yen weakened marginally after the announcement to trade against the US dollar at 134.92.

— Lim Hui Jie

Chinese tech stocks tumble

U.S.-listed Chinese technology stocks plummeted on Tuesday.

The pullback in shares came amid news that e-commerce company is reportedly launching a subsidy program to counter its rival Pinduoduo