Asia Market News $CAF $EWJ $FXP

·         China conducting yuan “stress tests” according to press reports this morning; gauging impact to its companies from a higher yuan; the headlines prompting speculation that a revaluation could be coming.  The China Council for the Promotion of International Trade is conducting yuan tests at more than 1,000 companies in 12 industries, Vice Chairman Zhang Wei told a press briefing in Beijing today. He said policy makers should delay the resumption in gains to give exporters more time to recover from the global recession.  Bloomberg

·         China & the yuan – the US ambassador to China, Jon Huntsman, has called on China to permit “more flexibility” on the yuan exchange rate – WSJ    

·         China & the yuan – China calls US demands to strength its yuan “unfair and harmful” – Reuters 

·         China home prices – two Hong Kong homebuilders says Chinese home prices are unlikely to plunge from current levels; “China’s home prices won’t drop too much, as the government can’t allow prices to plunge because the real estate market is an important pillar of the economy,” said Henry Cheng, managing director of New World Development – Bloomberg

·         Chinese banks - China’s banks are financially strong enough to withstand the pressure on profits as non- performing loans increase after record credit growth, according to Standard & Poor’s Ratings Services – Bloomberg

·         China banks - China has banned banks from providing loans to developers found to be hoarding land or holding back sales of apartments to wait for higher prices, the China Securities Journal reported today, citing an unidentified person.

·         China – Chinese cable-television operators and computer-networking equipment makers rose the most in Shanghai trading on reports the gov’t may allow the bundling of telephone, Internet and television services.  China may start trials for the operation of networks that combine telephone, Internet and television services in June, the Shanghai Securities News reported today, citing Minister of Industry and Information Technology Li Yizhong. Plans for the trials may be issued in May, the Shanghai-based newspaper reported, citing Li. [Bloomberg]

·         China is closer to a trade war with the U.S. than any time in the last five years as the two trade barbs over the proper value of the Chinese currency, according to CS economists. [Bloomberg]

·         US-China Ties - U.S. Ambassador to China Jon Huntsman said he is confident bilateral ties are improving following disputes ranging from currency valuations to weapons sales to Taiwan. Huntsman said in a speech at Tsinghua University in Beijing today “I am convinced that blue skies are already on the horizon.”  [Bloomberg]

·         Hong Kong - Unemployment rate fell to 4.6% in the three-month period ended February vs. St. 4.8%. [DJ]

·         Japan - Corporate sentiment continued to improve in March: In today's March Reuters Tankan large firm survey, the manufacturing DI rose further to -8, the strongest reading since June 2008, from -13 in February.  Miwako Nakamura