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On November 20th, a CLSA research report indicated that Kingsoft Corporation (03888.HK) reported lower-than-expected revenue in the third quarter, dragged down by its gaming business. Gaming revenue declined by 47% year-on-year, 8% lower than the reports forecast, due to pressure from the exceptionally high base of major titles last year. Office software revenue growth accelerated, rising 26% year-on-year, driven by progress in government IT application innovation and WPS 365. Individual paying user growth remained solid, and average revenue per user stabilized. The report believes the gaming business will continue to face pressure in the coming quarters, but the office software business may maintain strong momentum. The report lowered its 2025 and 2026 revenue forecasts by 3% and 4% respectively, and its net profit forecasts by 15% and 18% respectively. The target price was lowered from HK$37.8 to HK$35.5, while maintaining an "Outperform" rating.On November 20th, Nomura reported that Pinduoduos (PDD.O) overseas business may have recovered. Following the US governments termination of small-amount exemptions in May, Pinduoduos Temu platform changed its strategy and increased its recruitment efforts for US sellers. Temu is also rapidly expanding in markets outside the US. These moves have helped Temus business recover. Nomura maintains a neutral rating on Pinduoduo ADR with a target price of $136.On November 20th, Bernstein analysts stated in a report that the current upward cycle in memory chips is expected to squeeze camera budgets for low-end Android smartphones next year, but will have minimal impact on flagship Android models and Apples supply chain. After two consecutive years of growth, the Android phone market may level off next year. Smartphone manufacturers need to find a balance between product specifications, sales volume, and their own and their suppliers profitability. For low-end models, manufacturers are renegotiating prices, and camera specification upgrades may be delayed. However, a trend of industry-wide configuration reductions similar to that of 2022 is not expected.November 20th, Futures.com analysts latest view: Spot gold prices rose during the session, benefiting from the continuation of the main bullish trend, and its movement is along the short-term support secondary trendline, indicating that spot gold is attempting to break through the negative pressure from the EMA50 again. Previously, the EMA50 had hindered the price recovery.November 20th, Futures.com analysts latest view: WTI crude oil futures prices rose slightly, attempting to recover some of the previous losses, mainly benefiting from its attempt to correct the clearly oversold state on the Relative Strength Index (RSI). In particular, positive overlapping signals supporting price movements appeared in the short term, providing support for prices. This intraday rebound indicates that prices are in a brief respite after the previous wave of declines.

USD/JPY Reverses Two-Day Advance Despite Positive Rates and Bullish Fed Statements

Alina Haynes

Feb 15, 2023 14:36

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Following a two-day winning run, USD/JPY returns to the bears' radar early on Wednesday as market players evaluate the Fed's hawkish decision in relation to their expectations for the Bank of Japan's (BoJ) next move. As a result, the Yen pair re-establishes its intraday low near 132.70 and has posted its first daily loss in three days, down 0.20% as of press time.

 

The Japanese government's choice of a hawkish leader for the Bank of Japan (BoJ) board appears to have pressured USD/JPY negative in recent days, despite the rise in US Treasury bond yields and the US Dollar's rebound following US inflation data.

 

The Japanese government nominated Kazuo Ueda as Governor of the Bank of Japan on Tuesday. Notably, Bloomberg published an article saying that the Bank of Japan's easy-money policy could be challenged as a result of Ueda's hawkish predisposition.

 

Even if inflation did not exceed "positive surprise" expectations, the majority of Federal Reserve (Fed) policymakers outside of the United States supported additional rate hikes. The yields on US Treasury bonds and the US Dollar were driven by the same factor.

 

The US Consumer Price Index (CPI) increased by 6.4% year-over-year, exceeding market estimates, but registering the slowest increase since 2021 and falling below 6.5% previously. Importantly, the CPI excluding food and energy, often known as the Core CPI, rose by 5.6% compared to market forecasts of 5.5% and prior readings of 5.5%.

 

Following the release of the numbers, the president of the Dallas Fed, Lorie Logan, indicated that they must be prepared to continue rate hikes for a longer period than previously planned. John Williams, president of the New York Federal Reserve Bank, reiterated this attitude, noting that the task of containing high inflation is not yet accomplished. In addition, Patrick Harker, president of the Federal Reserve Bank of Philadelphia, intimated that they are not quite finished (with raising rates), but that they are close.

 

US 10-year Treasury bond rates fluctuate around 3.75% after increasing three basis points (bps) to reestablish a six-week high, while the two-year equivalent climbed to its highest level since early November 2022 by reaching 4.62%.

 

Despite this, S&P 500 Futures track Wall Street's bearish closing to highlight the somewhat pessimistic outlook and weigh on the USD/JPY exchange rate, mostly due to the Japanese Yen's (JPY) traditional attraction for risk aversion.

 

Lack of substantial Japanese data/events makes the USD/JPY pair susceptible to US stimuli for direction. The January Retail Sales and Industrial Production figures as well as the February New York Empire State Manufacturing Index should be examined closely.


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