Asia-Pacific stocks trade higher, BOJ leaves yield range unchanged

Japanese yen weakens after BoJ announces no change in yield curve range

The Japanese yen weakened against the greenback after the Bank of Japan surprised the markets by keeping its tolerance margin on the yield curve unchanged.

The Japanese yen weakened 2.04% against the US dollar after the news and last stood at 130.94.

“The Japanese economy is expected to continue growing at a rate above its potential growth rate,” the central bank said in a statement.

The Bank of Japan also left its interest rate unchanged at an ultra-dovish -0.1% – in line with expectations and maintaining the same rate it has maintained since 2016.

—Jihye Lee, Lee Ying Shan

Gambling shares jump after China grants licensing approvals

Hong Kong-listed gaming stocks rose after China granted licensing approvals for 88 games, including NetEase, Tencent Holdings and miHoYo, marking a further easing of a crackdown on gaming in Beijing.

Shares of NetEase jumped as much as 6.81% in early trade, hitting its highest level in more than four months. Tencent stocks added 0.11%.

–Lee Ying Shan

Bank of Japan expected to raise yield curve control another 50 basis points: UBS

Japan’s central bank is expected to widen its 10-year Treasury yield curve control range another 50 basis points to a range of 1% below and above its 0% target, it said. Tan Teck Leng, Executive Director of UBS Global Wealth Management.

“The scenario of a complete YCC abandonment is unlikely,” he said on CNBC’s “Squawk Box Asia,” adding that a move would be “unusual” from the central bank.

“I think the easiest thing for them is to take the cap off, let it find its fair value – but again, it’s very big uncertainties, so that’s why we think, as a ground of deal, they need to at least raise it to a cap of 1.0%,” he said.

The return on the 10-year Japanese government bonds broke above its band’s upper cap for a 5th consecutive session on Wednesday morning ahead of the BOJ’s monetary policy announcement.

Japan’s core manufacturing orders for November fall more than expected

Japan’s private sector manufacturing orders for November fell 8.3% from the previous month, official data showed.

The drop was significantly larger than Reuters’ expectations of a 0.9% decline. On an annualized basis, manufacturing orders fell 3.7%.

Private sector machinery figures exclude orders from volatile ones for ships and power companies.

—Lee Ying Shan

CNBC Pro: Thinking of getting back into Big Tech? This investor is wary of 2 stocks in particular

CNBC Pro: Morgan Stanley says cheaper electric vehicles are coming – and names global stocks that stand to benefit

As electric cars grow in popularity, a new manufacturing technique that could make them more affordable is sparking interest, according to Morgan Stanley.

Some automakers are outsourcing the process, which could benefit three major Asian parts suppliers, the Wall Street bank said.

CNBC Pro subscribers can learn more here.

—Ganesh Rao

Stocks end mixed day, Dow drops nearly 400 points

The Dow Jones Industrial Average fell to end the day as shares of Goldman Sachs weighed on the stock index.

The Dow fell 391.76 points, or 1.14%, to close at 33,910.85. The S&P 500 fell 0.2% to 3,990.97. The Nasdaq Composite gained 0.14% to end the day at 11,095.11.

—Tanaya Machel

Bank of America sees a later onset of recession

A recession is unlikely to begin until later in 2023 as consumer spending has been stronger than expected and the Federal Reserve is easing its stepped-up interest rate hikes, according to Bank of America.

“We are pushing back the timing of our outlook for a mild recession in the U.S. economy by about a quarter given the sustainability of consumer spending due to strong labor markets, excess savings, lower energy prices and easier financial conditions,” the company said in a client note. “That said, we believe the headwinds will cause consumers to reduce spending and increase the savings rate as the year progresses.”

This places the recession in the second quarter, driven by an investment-induced slowdown that trickles down to consumer spending.

After raising its benchmark borrowing rate by 4.25 percentage points in 2022, the Fed is expected to backtrack, with a 0.25 percentage point increase in February. This is expected to be followed by additional quarter-point increases in March and May.

Rate cuts will likely not occur until 2024, the firm said.

—Jeff Cox

Goldman Sachs shares fall on profit shortfall

Goldman Sachs shares fell 2.4% after the Wall Street investment bank shared fourth-quarter results that missed analysts’ expectations for both earnings and earnings.

The bank reported earnings of $3.32 per share on revenue of $10.59 billion. Consensus estimates called for earnings of $5.48 per share on revenue of $10.83 billion, according to analysts polled by Refinitiv.

Provisions for credit losses were also slightly higher than expected.

—Hugh Son, Samantha Subin

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