Live News: Asia-Pacific stocks fall after Powell’s rate hike comments

Japan’s current account deficit in January at a record high

Japan’s current account deficit hit a record high in January, according to Finance Ministry data released Wednesday morning.

At 1.98 billion yen ($14.41 billion), Japan’s trade deficit for the month far exceeded market expectations. It was also the largest deficit the country has ever recorded for a single month.

With Asia’s second-largest economy heavily dependent on imports for fuel and raw materials, officials blamed rising energy costs – as well as weak exports to China during the Lunar New Year holiday – on the deficit record.

Asia-Pacific stocks fall as Powell spooks investors

Asia-Pacific stocks fell Wednesday morning as investors took fright from hawkish comments from Federal Reserve Chairman Jay Powell.

South Korea’s Kospi lost 1.1% and Australia’s S&P/ASX 200 fell 0.9%. Hong Kong Hang Seng index futures were down 1.3%.

Powell warned on Tuesday that the Fed was ready to return to bigger interest rate hikes to fight inflation. His comments sent the two-year U.S. Treasury yield above 5% for the first time since 2007. The S&P 500 and Nasdaq Composite fell 1.5% and 1.2%, respectively.

What to watch in Asia today

Jakarta: China and the Association of Southeast Asian Nations will meet in the Indonesian capital to discuss the South China Sea, where tensions have risen amid overlapping territorial claims between a number of ASEAN member states and Beijing.

Earnings: Cathay Pacific publishes its results. Traffic at Hong Kong airport has rebounded from its pandemic lows, but passenger numbers are still significantly below 2019 levels.

Markets: Stocks fell in Japan and futures in Hong Kong fell. Shares on Wall Street fell after Federal Reserve Chairman Jay Powell warned that the central bank could raise interest rates more aggressively if the economy grows too quickly.

Elon Musk says Twitter could hit cash flow positive in Q2

Cost-cutting means Twitter’s costs are expected to be around $3 billion a year, Elon Musk says © Reuters

Elon Musk said Twitter could show positive cash flow again in the next quarter as the chief executive tries to cut costs, attract advertisers and navigate the platform’s technology issues.

Speaking at a Morgan Stanley investor conference on Tuesday, Musk said cash flow from the company he bought for $44 billion last year would break even in the second quarter, adding that they might even become positive during this period.

He said Twitter’s costs are expected to be around $3 billion per year, compared to the $4.5 billion it would otherwise incur in 2023.

Learn more about Musk’s cost-cutting plans here.

Senators introduce bipartisan bill paving way for possible TikTok ban in US

Senate Democrats and Republicans have introduced a bill that would give the administration new powers to ban Chinese apps that pose security threats, including popular video-sharing platform TikTok.

Mark Warner, the Democratic head of the intelligence committee, announced the bill on Tuesday as part of an effort to create a more coordinated approach across government to deal with threats from countries like China, Russia and Iran.

The Restriction Act would require the Secretary of Commerce to establish a process to identify communications and information technology threats and create solutions to address them.

Learn more about the proposed bill here.

Two-year Treasury yield tops 5% for first time since 2007

The two-year Treasury yield, which moves with interest rate expectations, topped 5% for the first time since 2007.

The yield hit a high of 5.01% – up 0.13 percentage points on the day – following remarks on Tuesday by Federal Reserve Chairman Jay Powell, who indicated that the US central bank could be poised to accelerate the pace of interest rate hikes in response to warmer than expected economic data.

Investors now expect interest rates to peak at 5.6% in September, with the possibility of just one cut by December.

Ukraine denies involvement in Nordstream pipeline explosions

The gas leak on the Nord Stream 2 gas pipeline seen at the end of September 2022
The gas leak on the Nord Stream 2 gas pipeline seen at the end of September 2022 © Danish Defense / AFP via Getty Images

Ukraine has denied any involvement in last year’s explosions that damaged Nordstream gas pipelines linking Russia and Western Europe, after media in the United States and Germany suggested pro-Ukrainian operatives could be the source of the attacks.

“Although I like collecting funny conspiracy theories about the Ukrainian government, I have to say that Ukraine has nothing to do with the Baltic Sea accident and has no information about” sabotage groups pro-Ukrainians,” said Mykhailo Podolyak, adviser to President Volodymyr Zelenskyy. , writing.

Podolyak was responding to a New York Times report that U.S. officials had reviewed new intelligence suggesting a “pro-Ukrainian group” had carried out the underwater bombings hitting both the Nordstream 1 and 2 pipelines.

Learn more about the alleged perpetrators here.

Leave a Comment