Japan’s Topix fell 3% in Asian trading on Silicon Valley Bank concerns

Declines in Japan’s Topix were led by financial, energy and consumer cycles in Tuesday’s morning trade, Refinitiv data showed.

The index fell more than 3%, reaching its lowest level since mid-January – with financial stocks losing more than 6%. Energy stocks saw a loss of 4.26% and consumer staples fell 3.15%.

Basic materials and real estate stocks fell nearly 3%, followed by industrials and utilities.

Based on index points, Toyota Motor Corp fell the most and traded 4.37% lower. Following Mitsubishi UFJ Financial Group and Sumitomo Mitsui Financial Group, Sony Group also dropped 3.1%.

– Jihye Lee

Asia-Pacific banks continued to see sharp falls in Tuesday morning trading.

Japan’s Softbank saw a decline of more than 3% in early Tokyo trading as investors continued to weigh concerns over the Japanese investment powerhouse.

Banks also saw sharp losses, with Mitsubishi Ufj Financial Group down 6.92%, SMFG down more than 7% and Mizuho Financial down 7.34% and Nomura down 4.6%.

Shares of South Korean defense technology company Firstec jumped 9%, bucking the selloff seen in the broader market.

Firstec makes components used in South Korea’s weapons systems such as guided munitions and ground combat vehicles.

The stock surge came after North Korea fired two short-range ballistic missiles off its east coast on Tuesday, and as Seoul and Washington held their largest joint military drills in five years.

Hanhwa Aerospace, which makes artillery and anti-aircraft systems, also rose 0.63%.

— Lim Hui Jie

China is set to resume issuing “various” visas for foreigners to enter the country, its US embassy said in a Chinese-language announcement translated by CNBC.

The changes announced overnight are set to take effect on Wednesday Beijing time.

Visas to enter China issued before March 28, 2020, will be revalidated, and foreigners can enter the mainland visa-free from Hong Kong, among other changes, it said. in the announcement.

The statement indicated that China will also continue programs that allow citizens of the US and other major countries to visit cities such as Beijing for a few days – without the need for a visa. The exact implementation remains unclear.

Mainland China tightened border controls in March 2020 in an attempt to prevent the local spread of Covid-19. The country scrapped its inbound quarantine requirements in early January.

— Evelyn Cheng

The dollar index is at 103.68, hovering around the weakest level since mid-February.

Asian currencies traded mixed on Tuesday morning, with the New Zealand dollar and the Australian dollar both strengthening to 0.6210 and 0.6651 against the greenback, respectively.

The Japanese yen was slightly weaker at 133.24 against the US dollar and the offshore Chinese yuan also weakened to 6.8591 against the greenback.

The Korean won was also slightly weaker at 1,297.49 against the US dollar.

The US consumer price index for February is expected to come in at 0.4% on a monthly basis or at a 6% annual pace, according to Dow Jones estimates.

This is only slightly lower than January’s inflation data of 0.5% and 6% respectively.

The CPI is the next data point that will provide insight into the Federal Reserve’s move ahead of its meeting on March 21 and 22.

A tepid inflation report will raise expectations that the Fed may raise rates by 50 basis points, up from the 25 points it implemented in February.

—Lim Hui Jie, Patti Dorm

The Monetary Authority of Singapore said its exposure to Silicon Valley Bank was “negligible.”

“Singapore’s banking system has little exposure to failed US banks,” MAS said in a statement on Monday.

“Singapore banks are well capitalized and conduct regular stress tests against interest rate and other risks,” it said, adding that their liquidity positions are healthy and supported by a “stable and different funding base.”

— Jihye Lee

The Federal Reserve’s top regulator will lead a review of the events that led to the collapse of Silicon Valley Bank, the central bank announced Monday.

Vice Chair for Supervision Michael S. Barr has been tapped for the review, the results of which will be released to the public May 1. The review will focus on the review and oversight of the SVB, where the Fed oversees its role as regulator. .

“The events surrounding Silicon Valley Bank require a full, transparent, and swift investigation by the Federal Reserve,” said Chairman Jerome Powell.

—Jeff Cox

President Joe Biden said Monday that Americans can be confident the US banking system is safe after regulators scrambled over the weekend to come up with a plan to backstop deposits at Silicon Valley Bank and Signature Bank. .

“Your deposits will be there when you need them. Small businesses across the country that have deposit accounts at these banks can breathe a little easier knowing they can pay their workers and pay on their bills,” he said in brief remarks Monday before the market. tomorrow.

Biden stressed that no losses will be borne by US taxpayers. Also, the management of banks will be replaced and bank investors will not be protected, he said.

Biden also called on Congress to find ways to strengthen banking rules to prevent these events from happening again.

—Christina Cheddar Berk

Many companies will find a higher interest-rate environment very difficult to operate, as demonstrated by the crisis at Silicon Valley Bank, said Anthony Doyle, head of investment strategy at Firetrail Investments.

“There will be winners and there will be losers and part of the challenge for investors today is to identify which companies will find this environment more difficult than they would in a zero interest rate world. ,” he said.

However, he identified three stocks that he thinks look strong in the new market environment.

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— Weizhen Tan