Asia-Pacific markets rise after Wall Street sees bank stocks rebound

Minutes from the Bank of Japan’s policy meeting in January showed members reiterating the need to maintain its ultra-dovish stance.

“The Bank should carefully explain that it needed to continue with monetary easing, that its accommodative monetary policy stance had not been changed, and that it would take time to achieve the price stability target of 2 percent in a sustainable and stable manner,” a member was quoted as saying.

Minutes from the meeting also showed board members expect to see further recovery in Japan’s economy.

“Some members expressed the view that the economy continued to pick up, led by domestic demand; specifically, a recovery in services demand and a virtuous cycle in the corporate sector had become the driving forces,” it said.

The yield on the 10-year Japanese government bonds slightly rose to 0.296% after plunging from above the upper ceiling of its tolerance range last Thursday to mark 0.276% on Tuesday.

– Jihye Lee

Japan financials rose in Wednesday’s morning trade, reversing the direction seen earlier in the week and following Wall Street banks’ rebound.

Tokyo-listed shares of Mitsubishi UFJ Financial Group rose 3.25%, Sumitomo Mitsui Financial Group gained 2.73% and Mizuho Financial Group was also up 2.04%. Nomura Holdings also rose 1.7%.

Technology giant SoftBank Group meanwhile continued to see marginal losses of 0.62%.

South Korea’s seasonally adjusted jobless rate for February fell slightly to 2.6%, down from January’s figure of 2.9%.

This was also lower than the 2.8% figure compared to the same period a year ago.

The total number of unemployed persons came in at 743,000, lower than January’s 842,000 and February’s 2022’s figure of 797,000.

— Lim Hui Jie

The collapse of U.S.-based Silicon Valley Bank is unlikely to affect Southeast Asian startups raising funding, venture capital firms told CNBC.

“I think [the impact on fundraising is] a watch out, but I don’t think that contagion spreads,” said David Gowdey, managing partner at Southeast Asian VC firm Jungle Ventures, on CNBC’s “Squawk Box Asia” on Tuesday.

He added that “funds in Southeast Asia are well capitalized” and “there is a lot of capital to deploy.”

Vinnie Lauria, managing partner at Golden Gate Ventures, said that this is the “time to shine” for Southeast Asia.

“[Southeast Asia] now looks like a golden child to U.S. investors,” said Lauria, on CNBC’s “Street Signs Asia” on Tuesday.

“Investors are starting to say: I want to diversify to different bank accounts, different geographies, different currencies.”

— Sheila Chiang

Moody’s Investors Service moved its view on the U.S. banking system to negative from stable on Monday, citing a “rapidly deteriorating operating environment.”

The move comes as the sectors reels following the closure of Silicon Valley Bank and Signature Bank. Banking stocks have mounted a comeback Tuesday after sliding over the past few sessions as concerns of contagion from the closures swirled.

“We have changed to negative from stable our outlook on the US banking system to reflect the rapid deterioration in the operating environment following deposit runs at Silicon Valley Bank (SVB), Silvergate Bank, and Signature Bank (SNY) and the failures of SVB and SNY,” Moody’s said in a report.

— Alex Harring, Jeff Cox

Markets have had a rocky March so far, as inflation fears returned and the collapse of Silicon Valley Bank sent investors into a risk-off mode.

Against this backdrop, CNBC Pro used FactSet to screen for stocks on the MSCI World index and S&P 500 that look well positioned to withstand the volatility and are expected to do well looking ahead.

CNBC Pro subscribers can read more about the stocks here.

— Weizhen Tan

Despite some speculation that recent bank failures might cause the Fed to hold off on interest rate hikes, market pricing indicates the central bank is still on track.

Consumer price index data released Tuesday morning was in line with market expectations, showing that the Fed still has work to do in its efforts to bring down inflation.

Traders were pricing in an 86.4% chance of a 25 basis point (0.25 percentage point) increase at next week’s Federal Open Market Committee meeting, up from levels earlier in the morning. Moreover, the implied level of the peak, or terminal, rate rose to just shy of 5%, according to CME Group data.

There were some murmurs, though, that the Fed should take a more cautious approach in light of the implosions at Silicon Valley Bank and Signature Bank.

“To be clear, we think further hikes now are unnecessary; the lagged effect of the increases over the past year are enough to push inflation back to target, but Fed officials have been unwilling so far to accept this argument and until last week they appeared set on further hikes,” wrote Ian Shepherdson, chief economist at Pantheon Macroeconomics.

“Recent events make a strong case for a pause until May, but at this point that would be a pleasant surprise rather than our base case,” he added.

—Jeff Cox

Worried about contagion from the collapse of Silicon Valley Bank? Veteran strategist Kenny Polcari believes the impact from SVB’s failure will be fairly limited.

While investors are mostly shunning the banking sector in the short term, Polcari sees “some very interesting opportunities” in the space, as well as in other segments of the market.

Pro subscribers can read more here.

— Zavier Ong

The S&P 500 financials sector rallied more than 2% to lead the broader market higher, boosted by regional bank names that sold off sharply in the previous session. As of shortly after 10 a.m. ET, the sector was on pace for its biggest one-day gain since Nov. 10, when it surged 5.1%.

Communication services and energy also gained more than 2%, along with technology.

— Fred Imbert

The consumer price index rose 0.4% in February from the prior month, matching a Dow Jones estimate. The year-over-year increase of 6% was also in line with expectations.

— Fred Imbert