China inflation, BOJ raise interest rates, Japan avoids technical recession

The Bank of Japan is expected to move toward ending its negative interest rate policy by April, contingent on annual wage negotiations, according to Thierry Wizman, global interest rates and currencies strategist at Macquarie Group.

Speaking to CNBC’s “Squawk Box Asia,” Wizman said recent strengthening stemmed from signals for a move away from negative rates and this year’s shunto spring wage negotiations between unions and employers.

“If we settle somewhere near 5% [wage growth], let’s say, I think that will satisfy the BOJ that we are finally starting to see an upward move in wage growth in Japan,” he said. Wizman noted, however, that “risk has shifted to a March shift in policy.”

Japanese government bond yields rose Monday, while the yen strengthened. The benchmark Nikkei 225 and Topix each fell about 3%.

— Dylan Butts

Japan’s Nikkei 225 led losses in Asia on Monday, falling over 2% and dragged by tech stocks.

According to Factset, semiconductor equipment manufacturer Advantest Corp was the largest loser on the index, down 6.32%. This was followed by counterpart Screen Holdings, which slipped 5.75%.

Other names on the top losers list also include Softbank Group, which declined 5.19% as well as Kawasaki Heavy Industries, which fell 4.16%.

As the buzz around artificial intelligence continues to build, investors are looking to identify the sectors best placed to benefit.

Ark Invest’s Tasha Keeney is no different.

Keeney, director of investment analysis and institutional strategies at the asset manager, estimates that the equity market capitalization attributable to innovation will jump to $220 trillion by the end of the decade, from the $15 trillion-$20 trillion it is at right now.

“Most of that … we expect is actually attributable to AI,” she said, naming segments — and three stocks — to cash in.

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— Amala Balakrishner

Japan posted a revised fourth-quarter GDP growth of 0.4% on an annualized basis, averting a technical recession.

This comes after earlier estimates had shown that Japan’s economy shrank 0.4% in the fourth quarter on an annualized basis, following a revised 3.3% slump in the third quarter, fulfilling the definition of a technical recession.

A positive GDP reading could clear the way for the Bank of Japan to raise rates sooner rather than later.

Read the full story here.

— Lim Hui Jie

China’s consumer price index climbed 0.7% year-on-year in February, marking the first time in four months that the country’s inflation rate rose.

The figure is a marked reversal from the 0.8% fall in January, which also was China’s largest rate of deflation since September 2009. It also beat the 0.3% rise that economists polled by Reuters were expecting.

On a month on month basis, the CPI rose 1%, higher than the 0.7% expected by the Reuters poll and compared to the 0.3% rise seen in January.

Separately, the country’s producer price index slipped 2.7% year-on-year, more than the 2.5% fall in January.

— Lim Hui Jie

Friday’s jobs data illustrates that the Fed is actually achieving its so-called dual mandate of having high employment while keeping inflation tame, said Jamie Cox, managing partner for Harris Financial.

“Labor is rolling, and wage inflation is rolling over — the Fed is threading the needle on its dual mandate,” Cox said. “No one expected this result, but it’s happening.”

— Alex Harring

Crude oil futures posted a weekly loss as lackluster demand out of China collided with a market that the International Energy Agency views as well supplied.

The West Texas Intermediate contract for April fell 92 cents, 1.2%, to settle at $78.01 a barrel on Friday. The Brent contract for May dropped 88 cents, or 1.1%, to settle at $82.08 a barrel.

U.S. crude and the global benchmark lost 2.45% and 1.8%, respectively, for the week.

“The big burst of China demand recovery continues to just not pan out and without it, it’s going to be hard for these prices to sustain themselves and recover further and get WTI back above 80 bucks,” John Kilduff, founding partner at Again Capital, told CNBC.

— Spencer Kimball

These are the stocks making the biggest moves during midday trading:

• Nvidia — Shares fell nearly 5%, as Nvidia took a breather from its winning streak. Earlier in the session, the stock notched a new 52-week high.
• Marvell Technology — The chip company sank more than 10% on light first-quarter earnings and revenue guidance.
• Costco — The stock slipped 7% after the warehouse club reported revenue of $58.44 billion for its fiscal second quarter, below the $59.16 billion consensus estimate, per LSEG.

Read the full list of stocks on the move here.

— Samantha Subin