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

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

The central bank kept its negative interest rate at -0.1% and reiterated its objective to keep the yield on Japanese 10-year government bonds around 0%.

“Japan’s economy, although affected by factors such as high commodity prices, has recovered as the recovery in economic activity has progressed,” the Bank of Japan said in its statement. of politics on Friday, concluding Governor Haruhiko Kuroda’s last meeting during his tenure.

—Jihye Lee

The Hang Seng index in Hong Kong posted steep losses on Friday morning, led by cyclical consumer stocks which fell 3.77%, healthcare stocks lost almost 3% and technology stocks fell 1.56%.

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

Real estate stocks such as Country Garden also posted huge losses down 2.73%.

Alibaba was among the lowest major moves, dropping 2.96%.

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

The approval by the House of Councilors sets the stage for the government to officially appoint Ueda, Kyodo reported.

The 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 cap of the central bank’s tolerance band at 0.5%.

UBS equity strategist Gerry Fowler says rising interest rates in Europe should push stock prices in a sector up 20%.

Fowler also revealed that several stocks in the sector were trading below an overlooked metric since “nobody really recognized” this phenomenon, despite “structurally higher” earnings potential.

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—Ganesh Rao

Bond yields rise as markets fret over renewed fears that the US Federal Reserve will keep interest rates higher for longer. The 2-year Treasury rose above 5% for the first time since 2007 earlier this week

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

CNBC Pro subscribers can learn more here.

—Weizhen Tan

The Bank of Japan is unlikely to change its monetary policy at the next meeting, according to a Reuters poll.

The powerhouse is expected to maintain its ultra-dovish stance and keep its benchmark interest rate at -0.1% at the two-day meeting that would mark Governor Haruhiko Kuroda’s last meeting before the end of his term in April.

Goldman Sachs cited three key factors for Kuroda not making any changes: the meeting’s proximity to the end of the fiscal year, ongoing salary negotiations, and “Kuroda’s longstanding view that rate hikes premature events delayed Japan’s exit from deflation”.

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

Kazuo Ueda is nominated to become the next BOJ governor.

— Lee Ying Shan

Japanese household spending fell 0.3% in January on an annualized basis, according to government data.

That’s still below expectations of economists polled by Reuters to see a 0.1% decline for the month from a year ago. Household spending in December fell 1.3%.

—Jihye Lee

South Korea’s current account balance fell back to a deficit of $4.52 billion in January, according to data from the Bank of Korea.

It comes after printing posted a $2.68 billion current account balance surplus in December.

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

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

It’s not just regional and tech-focused banks that are under pressure on Thursday.

The four largest US banks – JPMorgan, Bank of America, Wells Fargo and Citigroup – are all underperforming the broader market. Shares of Wells Fargo and Bank of America fell more than 6%.

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

—Jesse Pound, Christopher Hayes

Shares fell on Thursday, accelerating losses in the final hour of trading.

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

— Samantha Subin

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

“Taiwan Semiconductor Manufacturing Co. (TSMC) is a key beneficiary and part of our top 20 global AI stocks due to the increase and broadening of applications of large language models (LLMs) and AI generative, driven by ChatGPT,” Lin wrote.

“We believe generative AI should act as one of the biggest drivers, thanks to the substantial computational requirements to run and train the AI ​​models.”

—Sarah Min

Initial job applications reached 211,000 for the week ended March 4, the highest level for the year and since December 24.

Continuing claims also reached a yearly high, reaching 1.718 million for the week of February 25. This also marked the highest level dating back to December 17.

— Samantha Subin, Gina Francolla