Japan Leads Asia Stock Declines After Slide in GDP: Markets Wrap

(Bloomberg) -- Japanese stocks led Asian equities lower on Monday after the country reported a much deeper economic contraction than expected before any hit from the coronavirus. The Topix Index slid more than 1% in early trading, though bond yields and the yen showed little reaction to the worst nominal GDP performance since Prime Minister Shinzo Abe took office. Shares dipped in South Korea and Australia, but U.S. futures were slightly higher. Volumes may be lower than average Monday due to a U.S. holiday; Treasuries won’t trade.On the epidemic front, China over the weekend unveiled plans for reducing corporate taxes and fees, and letting banks run up more non-performing loans. The head of a hospital in Wuhan, the city at the center of the outbreak, said a turning point has been reached and that new infections are declining, CCTV reported.While investor sentiment improved the past two weeks amid optimism the outbreak may be nearing a peak, new cases outside of China are keeping traders on edge. The head of the International Monetary Fund praised China for its “very aggressive” measures to limit the impact of the disease. Hubei province on Monday reported almost 2,000 new cases and 100 additional deaths.“If the Chinese economy does recover and you’ve added all this fiscal and monetary stimulus into it aswell, the situation could be that you have much stronger emerging-markets into the second half” of the year, Sunny Bangia, a fund manager at Antipodes Partners Ltd., told Bloomberg TV in Sydney. “A lot depends on how this virus gets contained and if it can morph into something more minor.”Here are some key events coming up:Earnings season rolls on with results from companies including: BHP Group, Glencore Plc, HSBC Holdings Plc, Walmart Inc. and Deere & Co.U.S. celebrates Presidents’ Day on Monday, with financial markets shut.Minutes of the most recent Federal Reserve meeting are published on Wednesday.Indonesia is expected to cut interest rates on Thursday, following emerging-market peers from Brazil to South Africa which have lowered borrowing costs already this year.These are the main moves in markets:StocksFutures on the S&P 500 added 0.1% as of 9:12 a.m. in Tokyo. The index rose 0.2% on Friday.Japan’s Topix index lost 1.4%.Australia’s S&P/ASX 200 Index slipped 0.3%.South Korea’s Kospi index fell 0.4%.CurrenciesThe yen was flat at 109.76 per dollar.The offshore yuan was little changed at 6.9875 per dollar.The Australian dollar was little changed at 67.18 U.S. cents.The euro bought $1.0838.BondsThe yield on 10-year Treasuries slid three basis points to 1.58% on Friday.Australia’s 10-year yield were steady at 1.05%.CommoditiesWest Texas Intermediate crude was little changed at $52.03 a barrel.Gold was little changed at $1,584 an ounce.To contact the reporter on this story: Adam Haigh in Sydney at ahaigh1@bloomberg.netTo contact the editor responsible for this story: Christopher Anstey at canstey@bloomberg.netFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

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