Asia markets mixed after U.S. reaches debt ceiling deal; Japan stocks at highest since July 1990

Jihye Lee
Lim Hui Jie

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

TOKYO, JAPAN - SEPTEMBER 19: A general view of the Tokyo Tower and city on September 19, 2019.

Asia-Pacific markets were mixed after U.S President Joe Biden and congressional leaders reached a tentative deal to raise the debt ceiling over the weekend. The bill is expected to be voted on later this week.

In Japan, the Nikkei 225 closed 1.03% higher at 31,233.54, after an early surge saw the index jump as much as 2.04% on Monday. The Topix also gained 0.69% to snap a four day losing streak and close at 2,160.65

In Australia, the S&P/ASX 200 climbed 0.87% to end at 7,217.4 and continue a rally that started on Friday, while South Korea was closed Monday for a holiday.

Hong Kong's Hang Seng index continued sliding to new lows this year, falling 0.92% in its final hour of trade.

In mainland China, the Shanghai Composite rose 0.2% to end at 3,221.45 to record a second straight session of gains, but the Shenzhen Component fell 0.8% to close at 10,822.09, its lowest level since Nov 1, 2022.

.N225Nikkei 225 IndexNIKKEI39,910.82+744.63+1.90%
.HSIHang Seng IndexHSI16,589.44+78.00+0.47%
.AXJOS&P/ASX 200ASX 2007,745.60+46.90+0.61%
.KS11KOSPI IndexKOSPI2,642.36-9.93-0.37%
.FTFCNBCACNBC 100 ASIA IDXCNBC 1009,178.58+72.89+0.80%

U.S. futures also traded higher after Wall Street rallied on Friday, with the Nasdaq Composite posting a fifth straight week of wins.

Dow Jones futures gained 45 points of 0.14% while futures tied to S&P 500 and Nasdaq rose 0.22% and 0.4%, respectively. U.S. markets will be closed for Memorial Day.

— CNBC's Brian Evans and Alex Harring contributed to this report

Mon, May 29 2023 2:32 AM EDT

Week ahead: China PMI readings; Bank of Thailand meeting, South Korea GDP

China's purchasing managers' index readings for May alongside the Bank of Thailand's meeting and South Korea's inflation and gross domestic product reports will be in focus this week.

On Monday, Hong Kong's trade data for April will be published after the region saw a contraction of 0.6% in imports and a contraction of 1.5% in exports in March.

Japan's unemployment rate for April will be released as well as Australia's building approvals for the same month on Tuesday. Thailand's industrial production for April will also be released.

China's National Bureau of Statistics will publish the economy's purchasing managers index for May. Economists surveyed by Reuters expect the reading to remain under the 50-mark that separates contraction and growth at 49.4, after April's reading of 49.2.

The Bank of Thailand is set to announce its rate decision on the same day.

South Korea's industrial production for April on Wednesday is expected to show a further decline of 7.9% in April, according to economists surveyed by Reuters.

Retail sales for South Korea and Japan are also scheduled to be released on the same day. India will release its gross domestic product for the third quarter of the year. South Korea will also publish its latest trade figures alongside Australia's retail sales.

Indonesia markets will be closed on Thursday and Friday, while Singapore will observe a market holiday on June 2. South Korea's gross domestic product and its latest inflation readings will be released on Friday.

— Jihye Lee

Sun, May 28 2023 11:52 PM EDT

We still remain optimistic on China despite uneven recovery: Deutsche Bank

Deutsche Bank "remains optimistic" about China in the medium and longer term despite an uneven economic recovery, its chief investment officer for Asia Pacific Stefanie Holtze-Jen said.

"Overall, it is an uneven recovery. I think everybody understood that by now," said Holtze-Jen on CNBC's "Squawk Box Asia" on Monday. China's industrial firms saw profits fall at a slower pace in April while retail sales jumped 18.4% year on year.

"But they are parts of the economy that will be very much supported, especially on the consumer side. And we've got lots of rhetoric from the government regarding to that," said Holtze-Jen.

The Communist Party in April had said that it will maintain support for the economy, focusing on boosting domestic demand.

"We've seen the data around the May Day holiday in China being very interesting," she added. In the May Day holiday, China's tourism industry rebounded to pre-COVID 19 levels, with domestic trips soaring by more than two-thirds from a year ago.

"The rest of Asia is very much benefiting also from that China reopening story that will be with us for longer," said Holtze-Jen, noting that Thailand is reporting "very optimistic tourist inflows from China."

"We remain, especially compared to the U.S. and Europe, still very optimistic on the Asia complex," said Holtze-Jen.

— Sheila Chiang

Sun, May 28 2023 11:40 PM EDT

Turkish lira tumbles near weakest-ever levels after Erdogan retains office

The Turkish lira weakened against the U.S. dollar as incumbent Recep Tayyip Erdogan clinched victory in the 2023 presidential election, extending his rule into a third decade in power.

The currency was trading at 19.97 against the greenback as of Monday 4 a.m. London time.

"We have a pretty pessimistic outlook on the Turkish Lira as a result of Erdogan retaining office after the election," Wells Fargo's Emerging Markets Economist and FX Strategist Brendan McKenna told CNBC's "Squawk Box Asia."

"It's a very bleak economic and markets outlook for Turkey," McKenna added, forecasting that the lira will reach a new record low of 23 against the dollar by end of the second quarter.

—Lee Ying Shan

Sun, May 28 2023 11:15 PM EDT

U.S. dollar index to strengthen with economic data in focus this week, SMBC says

The dollar index could further strengthen to 105 in the short term with the U.S. jobs report to be released later this week as well as a looming vote on the debt ceiling deal, SMBC said in a Monday note.

"Asian currencies are expected to weaken, but the decline may be limited as more market participants are also looking for chances for Asian currencies to appreciate in preparation for risk-on sentiment after the Fed pauses rate hikes," Ryota Abe, Asia Pacific economist at Sumitomo Mitsui Banking Corporation (SMBC) wrote.

 The dollar index slid marginally to 104.164 in Asia's morning session. The Japanese yen slightly strengthened to 140.52 against the U.S. dollar, while the offshore Chinese yuan weakened to 7.0791 against the greenback.

"U.S. economic data released last week support hawkish stances on rate hikes," Abe wrote in the note. "Combined with CPI released earlier this month, the data show stronger than expected inflationary pressures, reigniting concerns over inflation in the US," he wrote.

— Jihye Lee

Sun, May 28 2023 11:44 PM EDT

Wharton's Siegel concerned about impact of tighter U.S. credit on SMEs

Wharton School Professor Jeremy Siegel said he is concerned tighter lending standards may combine with the U.S. Federal Reserve's "tremendous tightening" to hurt small and mid-sized companies later this year.

"I think smart money really settled that there was going to be a (debt ceiling) deal so it does clear a little bit of uncertainty, but there's a lot of worries ahead about the tremendous tightening that the Federal Reserve has done," Siegel told CNBC Monday.

"The bank problems that will not lead to a crisis of bank deposits but tightening of lending standards, particularly for small and mid sized companies," he added. "And I am concerned about the second half of the year and possibly what we might see is now a focus on those problems."

Clement Tan

Sun, May 28 2023 10:56 PM EDT

Nikkei 225 led by trading houses and technology stocks

Stocks of Japanese trading houses, distribution services and technology stocks were the top gainers on Japan's Nikkei 225 index on Monday, with the index jumping 2% at the open and last trading 1.32% higher.

Optical and imaging company Nikon was the top gainer on the index, advancing 4.51%, while semiconductor equipment manufacturer Advantest was the second largest gainer at 4.18% up.

Other names on the top gainers list included trading houses Sumitomo Corporation and Mitsubishi Corporation, as well as Softbank Group.

See Chart...

— Lim Hui Jie

Sun, May 28 2023 10:31 PM EDT

China sees argument for lowering interest rates, Deloitte economist says

China's latest industrial profit plunge provide an argument for its central bank to lower interest rates, Deloitte China told CNBC.

"There's no inflation in China, therefore you need a looser monetary policy," Deloitte China's chief economist Sitao Xu told CNBC's "Squawk Box Asia" on Monday.

He pointed to the People's Bank of China's daily USD/CNY reference rate, or the midpoint fix, as functioning similarly to a rate cut.

"If you look at the recent change on the exchange rate, the impact is the same as the lowering interest rate," he told CNBC.

The PBOC on Monday set its yuan fixing at 7.0575 compared to the previous session's 7.0760 against the U.S. dollar.

— Jihye Lee

Sun, May 28 2023 9:23 PM EDT

CNBC Pro: How much of A.I. is just hype? A bull and a bear share their tips on how to invest

Artificial intelligence has taken the investing world by storm since early this year — thanks largely to the emergence of ChatGPT, which triggered a wave of buying into AI-related stocks. 

Is it here to stay or just hype?

A bull and a bear faced off on CNBC's "Street Signs Asia," telling investors how they can navigate the dilemma, as well as what stocks to play the trend.

CNBC Pro subscribers can read more here.

— Weizhen Tan

Sun, May 28 2023 9:23 PM EDT

CNBC Pro: TSMC or Samsung? One chipmaker is the better play on A.I., geopolitics and earnings, analyst says

The Taiwan Semiconductor Manufacturing Company (TSMC) and Samsung Electronics have emerged as two key players in the increasingly competitive landscape of the chip-making sector.

TSMC's earnings are concentrated in the semiconductor manufacturing sector, but does Samsung's diversified electronics business model make it more resilient?

CNBC Pro subscribers can read more about an analyst's take on two chipmakers here.

— Ganesh Rao

Sun, May 28 2023 8:42 PM EDT

Singapore's Temasek cuts pay for senior management and investor team involved in FTX

Singapore state-owned investor Temasek cut the compensation of senior management and its investment team responsible for the recommendation to invest in failed cryptocurrency exchange FTX.

"Although there was no misconduct by the investment team in reaching their investment recommendation, the investment team and senior management, who are ultimately responsible for investment decisions made, took collective accountability and had their compensation reduced," Chairman Lim Boon Heng said in a statement.

The move from Temasek comes after an internal review was launched to look into its investment into FTX, which resulted in a write-down of $275 million.

Lim added that there was fraudulent conduct by FTX "intentionally hidden from investors, including Temasek." The statement did not specify how many staff were affected, nor the severity of the pay cuts.

— Lim Hui Jie

Fri, May 26 2023 11:38 AM EDT

Fed's Loretta Mester expects interest rates will have to rise

Cleveland Federal Reserve President Loretta Mester told CNBC on Friday that she expects more interest rate increases will be needed as inflation stays elevated.

"When I look at the data and I look at what's happening with the inflation numbers, I do think we're going to have to tighten a bit more," Mester said on "Squawk on the Street." "We've made progress. Now it's this calibration exercise, and that's what's difficult."

Mester is a nonvoting member this year on the rate-setting Federal Open Market Committee.

—Jeff Cox

Fri, May 26 2023 8:39 AM EDT

Preferred Fed inflation gauge rises more than expected

The core personal consumption expenditures index, the Fed's preferred gauge of inflation, rose 0.4% in April. That's more than economists polled by Dow Jones expected. Year over year, core PCE rose 4.7%, also more than expected.

— Fred Imbert

Fri, May 26 2023 9:19 AM EDT

Markets now expecting Fed rate hike in June

Markets raised their bets for a June rate hike from the Federal Reserve following hotter-than-expected inflation data Friday morning.

Odds for a quarter percentage point increase jumped to 56%, according to CME Group data. That followed a report showing that personal consumption expenditures prices rose 0.4% in April and 4.7% from a year ago.

The chances of an increase were just 17% a week ago. The probability of a hike by no later than July rose to 75%.

—Jeff Cox

Fri, May 26 2023 11:13 AM EDT

Consumer sentiment slightly beats expectations

The final reading on May consumer sentiment was slightly above expectations. The University of Michigan's consumer sentiment index came in at 59.2, while economists polled by Dow Jones had forecast a reading of 57.7.

To be sure, that level is well below April's 63.5.

"Consumer sentiment slid 7% amid worries about the path of the economy, erasing nearly half of the gains achieved after the all-time historic low from last June. This decline mirrors the 2011 debt ceiling crisis, during which sentiment also plunged," Surveys of Consumers director Joanne Hsu wrote.

— Fred Imbert

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