--- title: "Asian equities drop; yen declines on BOJ report: markets wrap" description: "Stocks in Asia dropped as an unexpectedly strong US jobs report raised the prospects of more rate hikes from the Federal Reserve, while concern over US-China geopolitical tensions also weighed on sentiment." type: "NewsArticle" publisher: "Daily Maverick" site: "https://www.dailymaverick.co.za" section: "International Finance" author: "Bloomberg" author_url: "https://www.dailymaverick.co.za/author/bloomberg/" canonical_url: "https://www.dailymaverick.co.za/article/2023-02-06-asian-equities-drop-yen-declines-on-boj-report-markets-wrap/" published: "2023-02-06T05:56:01" lang: "en-ZA" word_count: 866 --- # Asian equities drop; yen declines on BOJ report: markets wrap > Stocks in Asia dropped as an unexpectedly strong US jobs report raised the prospects of more rate hikes from the Federal Reserve, while concern over US-China geopolitical tensions also weighed on sentiment. By Bloomberg · Published 6 February 2023, 07:56 SAST ## Key points - The US dollar gained ground on Monday following the release of positive jobs figures, while South Korean stocks and US equity futures declined. Hong Kong and Chinese markets also saw losses after the Biden administration delayed Antony Blinken's visit to China, raising questions about improving Sino-US relations. Japan's Nikkei rose after reports that the government had approached Bank of Japan deputy governor Masayoshi Amamiya about succeeding Haruhiko Kuroda as head of the central bank. Equity indexes in the US swung between modest gains and losses, with the S&P 500 still reaching an 8-month high for the week, while Treasuries yields climbed for a second day. Oil steadied as traders weighed rising demand from China, and gold rose. Adani Group assets continued to be volatile as Adani Enterprises shelved plans for its first public bond sale following Hindenburg Research’s claims for manipulation and accounting fraud. Key events this week include earnings from AP Moller-Maersk, Apollo Global Management, AstraZeneca, BNP Paribas, BP, CME Group and more; rate decisions from Australia and India; US President Joe Biden's State of the Union address; Fed chair Jerome Powell speaking at the Economic Club of Washington; and Eurozone retail sales data. - US dollar climbs on strong payrolls and unemployment data - Shares fall in Hong Kong and mainland China - Japan stocks climb and yen weakens on central bank speculation - Adani Group assets face continued volatility this week ## Content The dollar climbed on Monday after a gauge of its strength rose more than 1% on Friday, when figures showed a surge in payrolls and unemployment at a 53-year low. This points to persistent US inflation and bolsters the case for more rate increases. South Korean stocks and contracts for US equities also declined. Shares fell in Hong Kong and mainland China, with the Hang Seng Index on course for the lowest close in a month. US-listed Chinese stocks slipped on Friday after the Biden administration decided to postpone Secretary of State Antony Blinken’s upcoming trip to China in light of an alleged Chinese spy balloon that was later [shot down](https://www.bloomberg.com/news/articles/2023-02-04/chinese-balloon-downed-by-us-off-carolina-coast-ap-says). “The episode should be a big surprise to investors given the market’s previous expectation was that Sino-US relationship could improve after the now called-off Blinken visit,” said Willer Chen, senior research analyst at Forsyth Barr Asia. In Japan, stocks climbed and the yen weakened after the Nikkei [reported](https://www.bloomberg.com/news/articles/2023-02-05/masayoshi-amamiya-approached-to-head-bank-of-japan-nikkei-says) that the government had approached Bank of Japan deputy governor Masayoshi Amamiya about succeeding Haruhiko Kuroda as head of the central bank. While the Japanese government refuted the report, investors assume a greater likelihood of the current ultra-easy monetary policy enduring if one of its architects succeeds Kuroda. “The chances of rejecting current policy have become slim,” said [Toru Suehiro](https://www.bloomberg.com/news/articles/2023-02-05/masayoshi-amamiya-approached-to-head-bank-of-japan-nikkei-says), chief economist at Daiwa Securities, in a note. “While the scrapping of yield-curve control is possible once the stabilisation of the bond market is confirmed, a clear rate-hike move like ending the negative rate seems unlikely.” US stocks halted a three-day advance on Friday in a volatile session that saw equities swerve between modest gains and losses as investors contended with the labor data. The S&P 500 still notched a weekly gain that took the index to its highest level since August. The Nasdaq 100 also scored a weekly advance, despite heavy selling after Apple, Alphabet and Amazon.com reported disappointing results on Thursday. “The Friday data had serious implications for Fed policy. Simply put, it confirms our long-standing belief that the Fed will have to go higher for longer than what optimistic market scenarios had priced in,” Win Thin, global head of currency strategy at Brown Brothers Harriman, wrote in a note. “We still have a ways to go to get to peak Fed Funds rate, and yet folks are still looking for second half rate cuts in what would be an extremely quick turnaround.” Yields on Treasuries rose for a second day, while Australia’s three-year yield jumped more than 10 basis points at the open. Elsewhere, oil [steadied](https://www.bloomberg.com/news/articles/2023-02-05/oil-steadies-after-slump-as-iea-points-to-rising-china-demand) as traders took stock of the outlook for demand in China and the latest sanctions on Russian energy flows came into effect. Gold rose. Adani Group assets are set for continued volatility this week. Flagship Adani Enterprises decided to [shelve plans](https://www.bloomberg.com/news/articles/2023-02-04/adani-flagship-shelves-122-million-bond-plan-after-market-rout) for its first-ever public sale of bonds, according to people familiar with the matter. While declines in shares were less savage on Friday than in previous days, the stock rout has roughly [halved](https://www.bloomberg.com/news/articles/2023-02-05/adani-saga-enters-third-week-as-officials-jump-in-to-calm-nerves) the market value of firms in the Indian group since Hindenburg Research’s claims for manipulation and accounting fraud. “It’s clearly very important to the country because the operating businesses are so widespread,” Belita Ong, chairman of Dalton Investments, said on Bloomberg Television. “Our belief is that the government will take whatever steps are necessary to stabilise the situation, make sure the operating entities are working.” #### Key events this week: - Earnings this week are scheduled to include: AP Moller-Maersk, Apollo Global Management, AstraZeneca, BNP Paribas, BP, CME Group, Duke Energy, KKR, Nintendo, PepsiCo, Semiconductor Manufacturing International, Siemens, SoftBank Group, Toyota Motor, Uber Technologies, Unilever, Walt Disney - Eurozone retail sales, Monday - Australia rate decision, Tuesday - US trade, Tuesday - Fed chair Jerome Powell at the Economic Club of Washington, Tuesday - US President Joe Biden delivers the State of the Union address, Tuesday - India rate decision, Wednesday - US wholesale inventories, Wednesday - New York Fed’s John Williams at event in New York - Sweden rate decision, Thursday - US initial jobless claims, Thursday - ECB president Christine Lagarde participates in EU leaders summit, Thursday - Bank of England governor Andrew Bailey appears before Treasury Committee, Thursday - China PPI, CPI, BoP, Friday - US University of Michigan consumer sentiment, Friday - Fed’s Christopher Waller and Patrick Harker speak, Friday #### Some of the main moves in markets: **Stocks** - S&P 500 futures fell 0.3% as of 12.09am Tokyo time. The S&P 500 fell 1% - Nasdaq 100 futures fell 0.4%. The Nasdaq 100 fell 1.8% - Japan’s Topix index rose 0.6% - South Korea’s Kospi index fell 0.9% - Hong Kong’s Hang Seng Index fell 2.4% - China’s Shanghai Composite Index fell 1% - Australia’s S&P/ASX 200 index fell 0.2% **Currencies** - The Bloomberg Dollar Spot Index rose 0.1% - The euro was unchanged at $1.0795 - The Japanese yen fell 0.5% to 131.89 per dollar - The offshore yuan rose 0.2% to 6.7899 per dollar **Cryptocurrencies** - Bitcoin was little changed at $22,905.26 - Ether rose 0.2% to $1,625.88 **Bonds** - The yield on 10-year Treasuries advanced three basis points to 3.55% - Japan’s 10-year yield was steady at 0.49% - Australia’s 10-year yield advanced 10 basis points to 3.48% **Commodities** - West Texas Intermediate crude rose 0.3% to $73.58 a barrel - Spot gold rose 0.5% to $1,873.48 an ounce. **BM/DM**