Japanese exporters trade lower on fears of a worse than expected U.S. slowdown

- South Korean consumption seems to have hit a bottom in Q1: (KS Q1 PRELIMINARY GDP QOQ: 0.9% V 0.9% expected; YOY: 4.0% V 3.9% expected). Finance Minister Okyu said this month the growth rate in the second half will be "higher" than the first six months, and today's GDP data seems to confirm his view. Q1 private consumption climbed 1.3% q/q as the gap between domestic consumption and exports narrowed. The consensus seems to be that the Bank of Korea is considering a rise in interest rates, but is unlikely to take such an action this year. BoK governor Lee said that he sees business investing accelerating, adding that the Korean housing market and Chinese economy need to be closely watched.

- Equities: The Nikkei225 is lower by more than 0.90% as weaker than expected U.S. consumer confidence and housing data, combined with a firmer JPY, inspired declines in shares of exporters. The Kospi index opened at a new record high, but gave up gains and is currently lower by more than 0.20%. Declines on the Kospi are being led by Posco Steel and Hyundai Heavy. Chinese equities largely ignored hawkish talk from the PBoC, with the Shanghai Composite index currently in positive territory. The Hang Seng tracked Chinese equities, but upside was limited. Declines on the Hang Seng are being led by China Mobile and HSBC.

- Forex: The USD was little changed against the European currencies after weaker than expected data raised new concerns over the health of the U.S. economy. Despite many analysts expecting consolidation after yesterday's soft CPI data, the AUD gained sharply during Asian trade. Domestic Aussie inflation remains elevated and at the top of the RBA band, and the RBA is expected to remain hawkish in coming weeks. Going forward, a strong Chinese economy is fueling demand for Aussie commodities, providing support to the AUD. The JPY recovered some ground, with USD/JPY trading around the 118.40 level.

- Japanese exports remain strong despite expectations of a U.S. slowdown: (JP MARCH TRADE BALANCE: ??1.634T V ??1.380T expected; ADJUSTED TRADE BALANCE: ??1.123T V ??0.950T expected) Some analysts are worried that export growth will lose momentum as U.S. economic growth slows, but today's data does not (yet) hint at this scenario materializing.

- Japanese consumer confidence survey: A survey of 400 people, performed by the Hakuhodo Institute, showed that the March Propensity to Consume Index stood at 52.0 vs. 50.9 in February and 54.7 in January.

- Peoples Bank of China starts hawkish talk after recent GDP data: PBoC deputy governor Su Ning said that China's economy is showing signs of overheating, adding that China has to curb excess investments.

- Commodities: Crude oil prices are little changed in Asian trading after traders took profits during the U.S. session ahead of Wednesday's inventory data. Spot gold is lower by about 0.10%, holding near the $687 level. Shanghai copper is lower on weaker than expected U.S. housing data.