Japan stocks drop nearly 2%; data shows China’s exports beat expectations

Key Points

• China’s exports grew slightly more than expected in December, while imports rose less than expected, according to customs data released Friday.
• Citi is set to sell its retail businesses in four Southeast Asian countries — Indonesia, Malaysia, Thailand and Vietnam — to Singapore lender United Overseas Bank.
• South Korea’s central bank raised its benchmark rate by 25 basis points to 1.25%, the highest since March 2020.

SINGAPORE — Stocks in Japan led losses in major Asia-Pacific markets on Friday as the recent rally in U.S. stocks broke momentum with the Nasdaq snapping a three-day winning streak.

Japan’s Nikkei 225 fell nearly 2% while the Topix tumbled 2%. Autos and tech stocks declined. SoftBank was down 2.25%, while Sony lost nearly 3%.

Hong Kong’s Hang Seng index fell 0.71. The Hang Seng Tech index lost 1.64%, as Alibaba declined 3.56% and JD fell 4%.

Mainland Chinese stocks struggled for direction, as the Shanghai composite declined 0.32%, while the Shenzhen component rose 0.48%.

South Korea’s Kospi was down 1.48%, and Australia’s ASX 200 also dipped 0.96%, with bank stocks falling.

Meanwhile, South Korea’s central bank raised its benchmark rate by 25 basis points to 1.25%, the highest since March 2020 and back to the rate it was at before the pandemic, according to Reuters.

In corporate news in the region, Citi is set to sell its retail businesses in four Southeast Asian countries — Indonesia, Malaysia, Thailand and Vietnam — to Singapore lender United Overseas Bank (UOB). UOB said Citi’s consumer business had a total net asset value of about $4 billion Singapore dollars ($2.9 billion).

The cash offer for the proposed acquisition will be calculated based on an aggregate premium equivalent to $915 million Singapore dollars, plus the net asset value of Citi’s consumer business, UOB said in a statement.

UOB shares rose 1.13% following the news.

China’s exports and imports rise

China’s exports grew slightly more than expected in December, while imports rose less than expected, according to customs data released Friday.

Exports rose by 20.9% year-on-year in U.S. dollar-terms, above the 20% increase forecast by a Reuters poll. Imports grew by 19.5% in U.S. dollar-terms, missing expectations of a 26.3% increase.

Overall, in 2021, total exports rose 29.9%, compared to a 3.6% gain in 2020. Imports jumped 30.1% in 2021, after dropping 1.1% in 2020, according to Reuters.

“Exports exceeded expectation again in December, which may reflect the Omicron damage to the global supply chain. Export orders may have shifted to China from other developing countries,” Zhiwei Zhang, chief economist at Pinpoint Asset Management, wrote in a note following the data release.

“On the other hand the global demand remained strong, as developed countries maintain their policies to keep economic activities unrestricted,” he added.

Inflation worries in focus

Over on Wall Street, stocks struggled on Thursday as a rebound in tech stocks faded, erasing gains from earlier this week.

The S&P 500 slid 1.42% to 4,659.03, while the Nasdaq Composite fell 2.51% to 14,806.81. The Dow Jones Industrial Average dropped 176.70 points to close at 36,113.62 after rising more than 200 points earlier in the day.

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Inflation worries continued to be in focus, as data stateside showed the producer price index, which measures prices received by producers of goods, services and construction, was up 0.2% for December. Overall, wholesale prices jumped nearly 10% in 2021, the highest calendar-year increase ever in data going back to 2010.

Elsewhere, Turkish President Recep Tayyip Erdogan pledged to bring down his country’s soaring inflation, which hit 36% in December, as the country’s central bank geared up for another rate-setting meeting next week.

Currencies and oil

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 94.783, continuing its slide since beginning of the week.

TICKER	COMPANY	NAME	PRICE	CHANGE	%CHANGE
.N225	Nikkei 225 Index	*NIKKEI	27945.7	-543.43	-1.91
.HSI	Hang Seng Index	*HSI	24222.64	-207.13	-0.85
.AXJO	S&P/ASX 200	*ASX 200	7409.3	-65.1	-0.87
.SSEC	Shanghai	*SHANGHAI	3533.31	-21.94	-0.62
.KS11	KOSPI Index	*KOSPI	2921.05	-41.04	-1.39
.FTFCNBCA	CNBC 100 ASIA IDX	*CNBC 100	10187.2	-113.74	-1.1

The Japanese yen traded at 113.81 per dollar, strengthening markedly from levels above 114. The Australian dollar was at $0.7267, falling back slightly.

Oil prices fell during Asia hours. U.S crude declined 0.35% to $81.84 per barrel, and Brent futures lost 0.3% to $84.28.

Source : CNBC