Hong Kong shares fall 2% as Asia continues Wall Street sell-off; The Bank of Japan holds the rates

The Bank of Japan left monetary policy unchanged, largely in line with expectations.

The central bank kept its negative interest rate at -0.1% and reiterated its goal of keeping the yield on the 10-year Japanese government bond around 0%.

“Japan’s economy, despite being affected by factors such as high commodity prices, has picked up as the resumption of economic activity has come,”[ads1]; the Bank of Japan said in its policy statement on Friday, which ended Governor Haruhiko Kuroda’s last meeting in its period.

– Jihye Lee

Hong Kong’s Hang Seng Index saw sharp losses on Friday morning, led by consumer discretionary stocks which fell 3.77%, healthcare stocks fell nearly 3% and technology stocks fell 1.56%.

JD.com fell 11.04% while Geely Automobile fell 5.49%. BYD lost 5.2% and Baidu fell 4.94%.

Property stocks such as Country Garden also saw big losses down 2.73%.

Alibaba was among the leading losers, falling 2.96%.

Japan approved the appointment of Kazuo Ueda as the next governor of the Bank of Japan, Kyodo reported.

The approval by the House of Councilors lays the groundwork for the government to formally appoint Ueda, Kyodo reported.

Parliament also approved Shinichi Uchida and Ryozo Himino as the next deputy governors of the Bank of Japan, Kyodo said.

The yield on 10-year Japanese government bonds fell slightly to the upper limit of the central bank’s tolerance range of 0.5%.

UBS equity strategist Gerry Fowler says interest rate rises in Europe should push share prices in one sector up by 20%.

Fowler also revealed that several stocks in the sector were trading below an overlooked metric since “no one has really recognized” this phenomenon, despite a “structurally higher” earnings potential.

CNBC Pro subscribers can read more about that sector here.

– Ganesh Rao

Bond yields are rising, as markets get jittery amid resurgent fears that the US Federal Reserve will keep interest rates higher for longer. The 2-year Treasury topped 5% for the first time since 2007 earlier this week

As prices rise, it becomes harder to find stocks that can compete on a yield basis – but some do exist. CNBC Pro used FactSet to search for global stocks on the MSCI World index with returns above 5%.

CNBC Pro subscribers can read more here.

— Weizhen Tan

The Bank of Japan is unlikely to make any changes to monetary policy at its upcoming meeting, according to a Reuters poll.

The central bank is expected to maintain its ultra-dove stance and hold its benchmark rate at -0.1% during the two-day meeting that will mark Governor Haruhiko Kuroda’s last before his term ends in April.

Goldman Sachs cited three key drivers for Kuroda not making any changes: the closeness of the meeting to the end of the fiscal year, ongoing wage negotiations, and “Kuroda’s long-held view that premature rate hikes have delayed Japan’s exit from deflation.”

Goldman analysts wrote “Some sliver of caution should still be taken,” adding that they believe “caution should be warranted in case Governor Kuroda takes responsibility for cleaning up his legacy policy of yield curve control.”

Kazuo Ueda has been nominated to be the next BOJ governor.

– Lee Ying Shan

Japan’s household spending fell 0.3% in January on an annual basis, government data show.

That is further below the expectations of economists polled by Reuters to see a 0.1% drop for the month compared with a year ago. Household consumption fell 1.3 per cent in December.

– Jihye Lee

South Korea’s current account returned to a deficit of $4.52 billion in January, Bank of Korea data showed.

This comes after the print had a surplus of 2.68 billion dollars in the current account in December.

The January report marks the first time South Korea’s current account has fallen into deficit territory since August 2022.

The Korean won stood at 1,323.92 against the US dollar.

It is not only regional and technology-focused banks that are under pressure on Thursday.

The four biggest US banks – JPMorgan, Bank of America, Wells Fargo and Citigroup – are all underperforming the broader market. Shares of Wells Fargo and Bank of America have fallen more than 6 percent.

Combined, the declines for the four banks represent a loss of approximately $56 billion in market value for the day.

— Jesse Pound, Christopher Hayes

The stock fell on Thursday, accelerating losses into the final hour of trading.

The S&P 500 fell 1.85% to 3,918.32, while the Dow Jones Industrial Average rose 543.54 points, or 1.66%, to settle at 32,254.86. The Nasdaq Composite declined 2.05% to end at 11,338.35.

– Samantha Subin

Bank of America analyst Brad Lin raised his price target on Taiwan Semiconductor Manufacturing’s US-listed shares to $115 from $105. The new target implies an upside of 26.6% from Wednesday’s close.

“Taiwan Semiconductor Manufacturing Co. (TSMC) is a key beneficiary and among our 20 global AI stock picks due to the growing and expanding use of large-scale language models (LLM) and generative AI, led by ChatGPT,” Lin wrote.

“We think the generative AI should act as one of the biggest drivers, thanks to the significant computational demands of running and training the AI ​​models.”

—Sarah Min

The initial job count reached 211,000 for the week ended March 4, the highest level of the year and since December 24.

Continuing claims also hit a yearly high, coming in at 1.718 million for the week of February 25. It also marked the highest level dating back to December 17.

— Samantha Subin, Gina Francolla