Asia markets mixed after Fed raises rates and hints hikes could end

Some Japanese lenders are reluctant to take part in Japan’s 550 billion yen ($4.1 billion) syndicated loan to finance the construction of a casino in Osaka after receiving government approval, Nikkei reported.

The report said some of the 20 or so expected to join the effort have “grown more skittish” after seeing global casinos shut down after the pandemic as well as growing local worries on gambling addiction and public safety.

MUFG Bank and Sumitomo Mitsui Banking Corp. are serving as lead arrangers for the syndicated loan, Nikkei reported. The two banks are expected to contribute between 200 billion yen and 300 billion yen in funding, the report added.

— Jihye Lee

Hong Kong’s monetary authority raised its base interest rate to 5.5%, following the U.S. Federal Reserve’s moves to raise the Federal Funds rate to 5-5.25% on Thursday.

The city’s base rate follows a preset formula, at either 50 basis points above the lower end of the U.S. federal funds rate or the average of the five-day moving averages of the overnight and one-month Hong Kong Interbank Offered Rates, whichever is higher.

The Hong Kong dollar has been pegged to the greenback since 1983, and trades at a tight band of $7.75 to $7.85 Hong Kong dollars per U.S. dollar.

As the average of the five-day moving averages of the overnight and one-month HIBORs is 3.28%, the base rate is therefore set at 5.5%, the HKMA said.

— Lim Hui Jie

Australia’s trade surplus came in at AU$15.27 billion ($10.2 billion) in March, higher than the AU$14.15 billion recorded in February, government data showed on Thursday.

The reading was higher than expectations of a decline to AU$12.65 billion in March, according to a Reuters poll.

The country’s statistics bureau revealed that exports rose 3.8% month on month to A$59.3 billion, driven by metal ores and minerals.

Imports increased 2.5% month on month to AU$44.02 billion, mainly due to non-industrial transport equipment.

— Lim Hui Jie

China’s manufacturing activity slipped into contractionary territory for the first time in three months as the Caixin manufacturing purchasing managers’ index came in at 49.5 in April, below estimates.

The reading also marks a drop from March’s 50.0 level and reflects downsizing in new orders.

“This suggests that China’s economic recovery significantly slowed after Covid-19 infections peaked at the start of this year, given that the index stood at 51.6 and 50 in February and March, respectively,” Caixin Insight Group’s senior economist Wang Zhe said in the release.

Still, businesses were confident that demand will pick up later in the year.

“Manufacturers remained highly optimistic, with the reading for their expectations for future output in April significantly higher than the long-term average, as they expressed strong confidence in market demand recovery and the implementation of relevant supportive policies,” Wang said.

— Jihye Lee

Domestic tourism in China during its Golden Week showed traffic surged 70.8% year-on-year, returning to levels seen before the pandemic, Reuters reported.

Goldman Sachs economists said in a Thursday note, “The strong Labor Day holiday tourism data bode well for consumption and services recovery in coming months, and add conviction to our above-consensus 2023 GDP growth forecast.” The firm estimates China’s economy to see full-year growth of 6% in 2023.

Chief China economist Xiangrong Yu at Citi said the rise in prices would be worth monitoring closely.

“With supply capacity for certain sectors starting to bind, we tend to think further demand expansion could lead to more hiring and inflationary pressure,” he said, noting China’s recovery so far has not been inflationary.

HSBC added that there is more to come in the recovery for Chinese travelers.

“We would argue that if you thought the Chinese travel rebound had played out, we believe it is just at the very beginning,” they wrote in a Wednesday note.

— Jihye Lee

Currencies in the Asia-Pacific strengthened against the greenback as the U.S. Federal Reserve signaled a potential end to its rate hiking cycle.

The offshore Chinese yuan strengthened by 0.3% to 6.900 against the greenback on Thursday morning as the dollar index slid 0.24% to 101.102.

The Korean won strengthened 0.6% to 1,326.84 against the greenback, and the Japanese yen strengthened 0.13% to 134.49 against the U.S. dollar. The Australian dollar was flat and the New Zealand dollar also gained by 0.24% to 0.6240 against the greenback.

— Jihye Lee

Shares of major Australian banks slid on Thursday after National Australia Bank missed earnings expectations in its half year ended March.

Revenue came in at AU$10.53 billion ($7 billion), a 19.3% rise year on year, while net profit stood at AU$3.97 billion, a 11.7% gain from the same period a year ago, NAB said.

NAB’s revenue missing estimates by 2% and earnings per share missing estimates by 5.61%, according to Refinitiv data. Net profit meanwhile was 2.31% higher than expectations.

Shares of NAB were down 7.57% on Thursday, while counterparts Commonwealth Bank of Australia and Westpac Banking also fell 2.84% and 4.24% respectively. Macquarie Group shed 2.22%.

China’s Caixin manufacturing purchasing managers index is expected to stay in expansionary territory in April, according to a Reuters poll of economists.

The reading is forecast to rise to 50.3 for the month of April after posting 50.0 in March, the poll showed.

This comes after manufacturing PMI data released by China’s National Bureau of Statistics disappointed over the weekend, falling below the 50-mark that separates growth and contraction at 49.2.

— Jihye Lee

The Fed raised rates for a 10th time in this tightening cycle, as was widely expected. The central bank also signaled a pause to the campaign could come.

“In determining the extent to which additional policy firming may be appropriate to return inflation to 2 percent over time, the Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments,” the Fed said in a statement.

The Fed also removed a sentence from the previous announcement, which said, “The Committee anticipates that some additional policy firming may be appropriate” for the Fed to achieve its 2% inflation goal.

For more, check out CNBC’s Fed live blog.

— Fred Imbert, Jeff Cox

Morgan Stanley Investment Management’s Andrew Slimmon says it’s time to buy some “offensive” stocks.

“So I think it’s very dangerous to own just very defensive stocks … I think you want some offensive in your portfolio,” Slimmon told CNBC’s “Squawk Box Asia” on Tuesday.

He explains why and names stocks to buy.

CNBC Pro subscribers can read more here.

— Weizhen Tan

Germany’s Volkswagen and BMW are set to announce their first-quarter earnings later on Thursday.

Using data from FactSet going back five years, CNBC Pro has assessed how well the automaker’s stock performs against benchmark indexes based on different outcomes of their quarterly earnings reports.

CNBC Pro subscribers can read more here.

— Ganesh Rao

The dollar index, which tracks the greenback’s performance against six other global currencies, fell more than 0.7% to a session low of 101.07 on Wednesday. That was its lowest level since April 16.

The move comes as Fed Chair Jerome Powell answers questions following the central bank’s latest policy decision.

— Fred Imbert, Gina Francolla

WTI Crude (JUN) prices fell 3.07%, hitting a low of $69.46 as of 7:28 a.m. ET Wednesday. This marked WTI Crude’s lowest price level since Mar. 27, when it traded as low as $69.13.

WTI Crude is down almost 9.5% week to date, on pace for its worst week since Mar. 17, when it lost almost 13%.

The Energy Select Sector SPDR Fund (XLE) is down 6.6% week to date, putting it on pace for its worst week since Mar. 17, when it lost 6.85%. Energy groups Halliburton and Exxon Mobil have lost 10.4% and 8.4% this week, respectively.

— Hakyung Kim, Gina Francolla