Asia Market Update: Another cautious session for the US equity FUTs in Asia amid geopolitics; Possible weekend risk?; More negative headlines seen regarding JP/CN trade; Key US focal points include jobs data, Supreme Court on tariffs and energy meeting.

General trend and developments

– China’s restrictions on Japan are beginning to pile up [Japanese food and alcohol products are reportedly seeing customs delays in China – Nikkei; CHINA HALTS REVIEW OF APPLICATIONS FOR RARE EARTH EXPORT LICENSES TO JAPAN – WSJ]

– Japan Trade Min Akazawa concedes China rare earth curbs have impacted companies.

– Japan Finance Min Katayama comments on rare earths: Will attend critical mineral meeting in the US next week; Specifically, to meet with counterparts in the US. between Jan 11-14th to discuss rare earths supplies; Cannot comment on details of the US meeting, including the participating countries, as the US as the host has not announced them.

– Bond traders assess Trump’s MBS plan.

– JGB curve pares steepening.

– Mixed equity trading seen in Asia; Nikkei outperforms on weaker Yen and Fast Retailing; South Korean Defense shares extend rally.

– Rio Tinto declines by >5% on huge M&A news [The co. noted the announcement by Glencore and confirmed that Rio Tinto and Glencore have been engaging in preliminary discussions about a possible combination of some or all of their businesses, which could include an all-share merger between Rio Tinto and Glencore.].

– MiniMax [0100.HK]: Shares rise by >50% in HK debut [Reminder Jul 16th 2025: BABA: DeepSeek rival ‘MiniMax’ reportedly could raise HK$ 4B-5B in IPO – press].

– Asian corporate earnings: Fast Retailing rises on guidance increase; LG Electronics results hurt by display business; LG Energy looked mixed

– TWD continues trade at the lowest level versus the US dollar since May 2025 [US Pres Trump said: It’s up to China’s Xi Jinping what China does in Taiwan – NYT interview].

– Offshore Chinese yuan (CNH) rises after stronger PBOC fixing.

Looking ahead (Asian-weighted focus, using Asian time zone)

– Upcoming US data includes Dec Nonfarm Payrolls; Oct Housing Starts and Building Permits; US Jan Michigan Consumer Sentiment; Canada Dec jobs data also due; Fed speakers include Kashkari, Barkin.

– (US) Supreme Court names Fri (1/09) as Opinion day as tariff case pending.

– Asia data releases for Mon include Australia ANZ Job Ads.

– Global meetings for next week: Japan Defense Chief Koizumi to visit the US from Jan 12- Press; Japan Finance Min Katayama comments on rare earths: Will attend critical mineral meeting in the US next week [Jan 11-14th]; South Korea President Lee plans to visit Japan between Jan 13-14th; Lee will meet with Japan PM Takaichi on Jan 13th [Tues].

Holidays in Asia this week

– None seen.

-Japan markets are due to close for holiday on Jan 12th (Mon).

-US markets have a holiday on Jan 19th (Mon).

Headlines/economic dataAustralia/New Zealand

-ASX 200 opens +0.4% at 8,758.

-(AU) TD said to now expect the RBA to raise rates by 25bps at the Feb meeting – US financial press.

China/Hong Kong

– Hang Seng opens +0.5% at 26,272.

– Shanghai Composite opens +0.1% at 4,086.

– (CN)*REPORTEDLY CHINA TO APPROVE SOME NVIDIA H200 PURCHASES AS SOON AS Q1 2026; TO ALLOW COMMERCIAL USE OF NVIDIA’S H200 AI CHIP – PRESS [Jan 8th].

-CHINA DEC CPI Y/Y: 0.8% V 0.8%E; PPI Y/Y: -1.9% v -2.0%e.

– China competition regulator [SAMR] said to now have meet with solar firms regarding monopoly risks and rectification methods – Press.

-Chinese Embassy to US: It’s neither reasonable nor realistic to ask China to join the nuclear disarmament negotiations with
US and Russia.

-China said to allow extension for the white list property loans – Press.

-China PBOC Open Market Operation (OMO): Injects CNY34.0B; Net injects CNY34.0B v injects CNY9.9B prior.

Japan

-Nikkei 225 opens +0.5% at 51,367.

-*(JP) CHINA HALTS REVIEW OF APPLICATIONS FOR RARE EARTH EXPORT LICENSES TO JAPAN – WSJ.

-Japan end-Dec Foreign Reserves: $1.37T v $1.36T prior.

– Japan Nov Household Spending Y/Y: +2.9% v -1.0%e.

– Japan Nov Preliminary Leading Index CI: 110.5 v 110.5e; Coincident Index: 115.2 v 115.1e.

-Japan Dec 1-20th Trade Data: Exports Y/Y: 6.2%; Imports: 3.9%.

-Japan sells ¥4.7T vs. ¥4.7T indicated in 3-Month Bills; Avg Yield: 0.6755% v 0.6926% prior; Bid-to-cover: 2.92x v 3.14x prior.

– Japan Defense Chief Koizumi to visit the US from Jan 12- Press.

-South Korea President Lee plans to visit Japan between Jan 13-14th; Lee will meet with Japan PM Takaichi on Jan 13th [Tues] – Local Media.

-Japan Chief Cabinet Sec Kihara: Aware of report China is delaying imports of sake and certain foods, important for Japan food exports to continue ‘smoothly’.

-Honda [HMC]: Reports Dec China Sales Y/Y: -40.3% v -33.8% prior.

South Korea

-Kospi opens -0.5% at 4,530.

-South Korea President Lee plans to visit Japan between Jan 13-14th; Lee will meet with Japan PM Takaichi on Jan 13th [Tues] – Local Media.

– South Korea Nov Current Account Balance: $12.2B v $6.8B prior; Balance of Goods (BOP): $13.3B v $7.8B prio.

Other Asia

– Indonesia Dec Consumer Confidence: 123.5 v 124.0 prior.

North America

-*(US) President Trump: Oil companies will spend at least $100B in Venezuela; could be ‘taking trillions’ of dollars worth of oil; According to a separate press outlet, Trump said ‘taking billions of dollars worth of oil’ [Fox News]; 14 oil companies to attend the meeting at the White House on Fri; The meeting will be held at 2:30 PM ET; To meet Secretary of State Rubio on Friday in the Oval Office at 11:00 AM ET.

– ConocoPhillips [COP] Says continues to monitor developments in Venezuela and their potential implications for global energy supply and stability; Confirms Chairman/CEO to attend meeting at the White House on Fri.

– Trump orders Fannie Mae and Freddie Mac to purchase of $200B of mortgage bonds in effort to make housing more affordable.

– US FHFA Dir Pulte: Trump’s order addressed Fannie and Freddie, who have the cash to buy $200B in mortgage bonds; Declines to provide specific details on funding and timeline for MBS purchases; Neither the US Treasury, nor the Fed, will be involved in MBS purchases [**Reminder: Fed holds ~$2.03T in MBS].

-(US) Treasury Sec Bessent: Lowering the suspicious activity report threshold to $3.0K, notes probe related to money services businesses in Minnesota; Not going to make institutional investors divest from home buying; we are going to put an end to the buying.

-JNJ [JNJ]: Announced two new additional manufacturing facilities to be built in North Carolina and Pennsylvania; continues to deliver on $55 billion U.S. investment.

-(US) INITIAL JOBLESS CLAIMS: 208K V 212KE; CONTINUING CLAIMS: 1.914M V 1.90ME.

-(US) Q3 PRELIMINARY NONFARM PRODUCTIVITY: 4.9% V 5.0%E; UNIT LABOR COSTS: -1.9% V -0.1%E.

Europe

-(RU) US President Trump feels strongly Russia will NOT invade Ukraine again – NYT; According to a separate interview, Trump declines comment on if he spoke with Putin after tanker.; Trump added oil from the seized tanker is being ‘unloaded’ right now.; Trump also said, he supports the Russia sanctions bill.

-(IR) US President Trump: Following Iran protests closely; put Iran ‘on notice’ not to shoot protesters [**Note: The largest protests in years said to sweep through the capital of Iran – WSJ].

– (UK) Chancellor Reeves set to announce U-turn on pubs business rates and provide relief package – FT.

Levels as of 00:20 ET

– Nikkei 225 +1.5% ; ASX 200 flat ; Hang Seng +0.1% ; Shanghai Composite +0.5% ; Kospi +0.5%.

– Equity S&P500 Futures flat; Nasdaq100 flat; DAX +0.1%; FTSE100 -0.3%.

– EUR 1.1662-1.1646 ; JPY 157.31-156.77 ; AUD 0.6704-0.6688 ; NZD 0.5755-0.5738.

– Gold +0.2% at $4,467/oz; BTC +0.2% at $90.9K; Crude Oil +0.6% at $58.12bbl; Copper +0.3% $5.8190/lb.