An electronic stock board outside a securities firm in Tokyo, Japan, on Monday, Nov. 21, 2022. (Photo: SeongJoon Cho/Bloomberg) 
A region-wide index of Asian stocks edged lower for a second day as benchmarks in Australia and South Korea fell, while Japanese stocks were flat and Chinese shares fluctuated.
The Federal Reserve’s monthly Beige Book survey released on Wednesday showed the US economy was “little changed” despite some signs of slowing. Fed Bank of New York president John Williams said the recent trend of slowing inflation continues but that price gains remain too high. Trader bets continue to lean towards a rate hike next month.
The yield on the policy-sensitive two-year Treasury was steady in Asia after rising five basis points to the highest level in a month.
New Zealand’s bond yields fell along with the currency after inflation data came in softer than anticipated. Australia’s 10-year yield was flat after the government released a review of the central bank.
The drop for US equity futures followed a flat day in New York trading. The CBOE VIX index of volatility to the lowest since 2021. A Bank of America global measure of volatility spanning stocks, rates, currencies and commodities sits at the lowest level since early 2022.
First-quarter US earnings were mixed. Tesla missed profit expectations while International Business Machines and Morgan Stanley beat forecasts.
“A recession doesn’t necessarily mean companies have to lose money,” Erin Gibbs, chief investment officer for Main Street Asset Management, said in an interview with Bloomberg Television. “Companies that have very strong free cash flows that don’t have to go to the banks and get new loans are the ones that tend to do well.”
In Asia, Taiwan Semiconductor Manufacturing earnings will be in focus. Analysts expect the chip giant to post weak results and will focus on full-year revenue guidance.
Bank of Japan officials are reportedly wary of tweaking or scrapping the yield curve control program when the central bank meets next week following the banking issues in the US and Europe. The yen weakened.
Banks in China kept loan prime rates unchanged after the People’s Bank of China stayed put. An independent review of Australia’s central bank recommended setting up an expert policy board and fewer meetings followed by press conferences.
Elsewhere in markets, the dollar was steady, Bitcoin dropped below $30,000. Oil fell while gold was steady after a decline on Wednesday pushed the precious metal below $2,000 an ounce. BM/DM