Hong Kong stocks tumble 3%, Asia continues Wall Street’s sell-off; Bank of Japan holds rates

Bank of Japan left its monetary policy unchanged, widely in line with expectations.

The central bank kept its negative interest rate at -0.1% and reiterated its target to keep the yield on the 10-year Japanese Government Bond around 0%.

“Japan’s economy, despite being affected by factors such as high commodity prices, has picked up as the resumption of economic activity has progressed,” Bank of Japan said in its policy statement on Friday, concluding governor Haruhiko Kuroda’s final meeting in his term.

— Jihye Lee

The Hang Seng index in Hong Kong saw sharp losses on Friday morning, led by consumer cyclicals that fell 3.77%, healthcare stocks shed nearly 3% and technology stocks dropped 1.56%.

JD.com fell 11.04% while Geely Automobile shed 5.49%. BYD lost 5.2% and Baidu shed 4.94%.

Property stocks such as Country Garden also saw huge losses down 2.73%.

Alibaba was among the leading bottom movers, falling 2.96%.

Japan approved the appointment of Kazuo Ueda as the next governor of the Bank of Japan, Kyodo reported.

The approval by the House of Councillors sets the stage for the government to formally appoint Ueda, Kyodo reported.

The parliament also approved Shinichi Uchida and Ryozo Himino as the next Bank of Japan deputy governors, Kyodo said.

The yield on 10-year Japanese government bonds slightly fell to the upper ceiling of the central bank’s tolerance range at 0.5%.

UBS’ equity strategist Gerry Fowler says that interest rate rises in Europe should push up stock prices in one sector by 20%.

Fowler also revealed that several stocks in the sector were trading below an overlooked metric since “no one has really acknowledged” this phenomenon, despite a “structurally higher” earnings potential.

CNBC Pro subscribers can read more about that sector here.

— Ganesh Rao

Bond yields are surging, as markets get jittery on reignited fears that the U.S. Federal Reserve will keep interest rates higher for longer. The 2-year Treasury topped 5% for the first time since 2007 earlier this week

As rates surge, it becomes harder to find stocks that can compete on a yield basis — but some do exist. CNBC Pro used FactSet to screen for global stocks on the MSCI World index with yields above 5%.

CNBC Pro subscribers can read more here.

— Weizhen Tan

Bank of Japan is unlikely to make any changes to its monetary policy in the upcoming meeting, according to a Reuters poll.

The central is expected to maintain its ultra-dovish stance and hold its benchmark interest rate at -0.1% during the two-day meeting which would mark governor Haruhiko Kuroda’s final one before his term ends in April.

Goldman Sachs cited three key drivers to Kuroda making no changes: The meeting’s proximity to the end of the fiscal year, wage negotiations underway, and “Kuroda’s long-held view that premature rate hikes have delayed Japan’s exit from deflation.”

Goldman analysts wrote “Some sliver of heed should still be taken,” adding that they think “caution should be warranted in case Governor Kuroda takes responsibility for cleaning up his legacy Yield Curve Control policy.”

Kazuo Ueda is nominated to become the next BOJ governor.

— Lee Ying Shan

Japan’s household spending fell 0.3% in January on an annualized basis, government data showed.

That’s further below expectations from economists polled by Reuters to see a drop of 0.1% for the month compared to a year ago. Household spending in December fell 1.3%.

— Jihye Lee

South Korea’s current account balance returned to a deficit of $4.52 billion in January, Bank of Korea data showed.

This comes after the print saw a surplus of $2.68 billion in current account balance in December.

January’s report marks the first time South Korea’s current account balance fell into deficit territory since August 2022.

The Korean won stood at 1,323.92 against the U.S. dollar.

It is not just regional and tech-focused banks that are under pressure on Thursday.

The four biggest U.S. banks — JPMorgan, Bank of America, Wells Fargo and Citigroup — are all underperforming the broader market. Shares of Wells Fargo and Bank of America have dropped more than 6%.

Combined, the declines for the four banks represent a loss of roughly $56 billion in market value for the day.

— Jesse Pound, Christopher Hayes

Stock tumbled Thursday, accelerating losses into the final hour of trading.

The S&P 500 slid 1.85% to end at 3,918.32, while the Dow Jones Industrial Average dove 543.54 points, or 1.66%, to settle at 32,254.86. The Nasdaq Composite shed 2.05% to finish at 11,338.35.

— Samantha Subin

Bank of America analyst Brad Lin raised his price objective on Taiwan Semiconductor Manufacturing‘s U.S.-listed shares to $115 from $105. The new target implies upside of 26.6% from Wednesday’s close.

“Taiwan Semiconductor Manufacturing Co. (TSMC) is a key beneficiary and among our 20 global AI stock picks owing to the rising and widening applications of large language models (LLMs) and generative AI, led by ChatGPT,” Lin wrote.

“We think the generative AI should act as one of the greatest drivers, thanks to the substantial computational requirements for running and training the AI models.”

— Sarah Min

Initial jobs claims hit 211,000 for the week ended March 4, the highest level of the year and since Dec. 24.

Continuing claims also hit a yearly high, coming in at 1.718M for the week of Feb. 25. That also marked the highest level dating back to Dec.17.

— Samantha Subin, Gina Francolla