Markets generally pare gains during the final trading session of 2022

Asia Market Update: Markets generally pare gains during the final trading session of 2022; JGB yields drop, more BOJ emergency bond purchases seen.

General trend

- USD/JPY extends decline.

- China official PMI data is due on Saturday [post US close].

Headlines/economic data

Australia/New Zealand

- ASX 200 opens +0.2% at 7,032.

China/Hong Kong

- Shanghai Composite opens +0.4% at 3,084.

- Hang Seng opens +1.5% at 20,030.

- (CN) China PBOC sets Yuan reference rate: 6.9646 v 6.9793 prior.

- (CN) China PBOC Open Market Operation (OMO): Sells CNY183.0B in 7-day reverse repos v CNY205B prior; Net inject CNY181.0B v net inject CNY201B prior (**Note: The weekly net cash injection is CNY975.0B [largest injection since 2019]).

- (CN) US considers airline wastewater testing amid COVID situation in China - financial press.

- (RU) Russian govt spokesperson Peskov: Confirms Pres Putin and China Pres Xi to speak on Fri, Dec 30th via videolink; To discuss bilateral and regional issues.

Japan

- Nikkei 225 opens +0.7% at 26,288.

-*(JP) Bank of Japan (BOJ) announces unscheduled outright bond buying operation [3rd straight session]: Offers to buy ¥300B in 10-25 year JGBs.

- (JP) Bank of Japan (BOJ) offers to buy 5-10 year JGBs at fixed rate of 50bps; Opens window to buy unlimited amount of 10-year JGBs at 0.50% [as expected]; Announces unscheduled 1-3 year and 3-5 year fixed-rate operations.

South Korea

- Kospi closed for holiday.

-*(KR) South Korea DecCPI M/M: 0.2% V 0.2%E; Y/Y: 5.0% V 5.1%E; CPI Core Y/Y: 4.8% v 4.6%e [BOK has a 2% inflation target].

- (KR) Bank of Korea (BOK): Reiterates inflation to hover around 5% for the time being, uncertainty very high over inflation [follows Dec CPI data].

- (KR) South Korea President wants to expand the tax benefit for chips – South Korean press.

- (KR) Follow Up: South Korea to ‘sharply’ raise electricity rates in Q1, to increase power prices by 9.5% – South Korea press.

- (KR) Follow up: South Korea to require travelers from China to take COVID tests before departure from China – South Korean media.

Other Asia

- (ID) Indonesia Trade Ministry: Cuts palm oil domestic marketing obligation (DMO) to exports ratio to 1:6, effective from Jan.

- (SG) Singapore Nov M2 Money Supply Y/Y: 1.7% v 3.2% prior; M1 Money Supply Y/Y: -8.8% v -6.8% prior.

North America

- (US) President Biden signs the $1.66T FY23 Omnibus funding bill (as expected).

Europe

- (IT) Italian press reports that 10% of travelers from China landing in Rome are testing Covid positive.

- (UK) PM Sunak plans to cut in half the aid that helps businesses pay fuel bills - The Times.

- (RU) Reportedly Russia Dep PM Novak ready to back Kazakh request for oil flow to Germany - press.

Levels as of 00:20 ET

- Nikkei 225, +0.2%, ASX 200 +0.3% , Hang Seng +0.8%; Shanghai Composite +0.6% ; Kospi closed.

- Equity S&P500 Futures: -0.1%; Nasdaq100 -0.2%, Dax -0.2%; FTSE100 -0.1%.

- EUR 1.0671-1.0652 ; JPY 133.09-132.38 ; AUD 0.6783-0.6752 ;NZD 0.6353-0.6316.

- Gold -0.1% at $1,823/oz; Crude Oil +0.4% at $78.72/brl; Copper -0.2% at $3.8230/lb.