As of 12:30amET:
- Nikkei225 -1.8%
- S&P/ASX -0.7%
- Kospi -0.7%
- Taiex -0.4%
- Shanghai Composite -1.2%
- US S&P Sept -0.5% 1,091
- Gold Aug $1,169/oz
- Crude oil at $78.08/brl

***Economic Data***
-(AU) AUSTRALIA JUN PRIVATE SECTOR CREDIT M/M: 0.2% V 0.4%E (7-month low); Y/Y: 2.8% V 3.1%E (11-month high)
-(JP) JAPAN JUN LOANS & DISCOUNTS CORP Y/Y: -4.1% V -3.5% PRIOR
-(JP) JAPAN JUN PRELIM INDUSTRIAL PRODUCTION M/M: -1.5% V 0.2%E (first contraction since Feb 2010, biggest decline since Feb 2009); Y/Y: 17.0% V 18.9%E (6-month low)
-(JP) Japan JUN Overall Household Spending y/y: 0.5% v -0.9% (3-month high) - update
-(JP) JAPAN JUN NATIONAL CPI Y/Y: -0.7% V -0.7%E (smallest contraction since Apr 2009); NATIONAL CORE Y/Y:-1.5% V -1.6%E; JUL TOKYO CORE CPI Y/Y -1.3% V -1.2%E
-(JP) JAPAN JUN JOBLESS RATE: 5.3% V 5.2%E (4th consecutive rise)
-(JP) JAPAN JUL NOMURA/JMMA MANUFACTURING PMI: 52.8 V 53.9 PRIOR (4-month low)
-(KS) SOUTH KOREA JUN LEADING INDEX Y/Y: 7.0% V 8.0% PRIOR
-(KS) SOUTH KOREA JUN INDUSTRIAL PRODUCTION MFG Y/Y: 17.4% V 22.3% PRIOR; INDUSTRIAL PRODUCTION M/M: 1.4% V 0.9%E PRIOR; Y/Y: 16.9% V 16.5%E
-(KS) SOUTH KOREA JUN SERVICE INDUSTRY OUTPUT Y/Y: 4.4% V 3.8% PRIOR
-(NZ) NEW ZEALAND JUN BUILDING PERMITS M/M: 3.5% V -9.5% PRIOR
-(SI) Singapore JUN Bank Loans & Advances y/y 9.0% v 8.0% prior; Credit Card Billings S$2.6B v S$2.5B prior; Credit Card Bad Debts S$15.3M v S$14.4M prior
-(SI) Singapore JUN M1 Money Supply y/y 20.5% v 22.3% prior; M2 y/y 7.4% v 9.0% prior
-(SI) SINGAPORE Q2 UNEMPLOYMENT RATE 2.3% V 2.2% PRIOR (first increase since Q3 of 2009)

***Overview/Top headlines***

- Asian equity markets are in the red across the board with even steeper losses than seen the day before, shrugging improved results from key electronics players like Sony overnight. Instead, the dreaded "d"-word (deflation) uttered by Fed's Bullard and warning of a Japan-like trap that sank benchmark Treasury yields back below 3% is weighing on the greenback to the benefit of the Yen, with USD/JPY falling to 8-month lows below 86.30. In turn, the resiliency of export-related names is tested, prompting fresh round of verbal intervention from the Cabinet Office. Deputy Fin Min Ikeda said the cabinet is watching the Yen levels with interest, warning about the impact of the rising Yen on the export industry. Meanwhile, a DPJ party panel is also taking a more aggressive approach on tackling deflation as well, calling for the BOJ to adopt an inflation target of about 2-3% with more quantitative easing. Further political pressure could weigh on the minds of BOJ policymakers going into the next meeting, while markets prepare to tune in for next critical event - Friday's US GDP report.

- On the corporate front, Samsung Electronics topped expectations with record profit in Q2, reporting Net KRW4.3T v KRW4.2Te, Op Profit KRW5.0T v KRW4.5Te, Rev KRW37.9T v KRW34.9Te. Company also improved its margins in chip, LCD, and telecom space as well as improved its interim dividend to KRW5K from KRW0.5K. Despite strong Q2 results, next quarter's guidance - namely competition-driven price pressure on margins - tempered investor optimism, as shares fell nearly 2% late in the day.

**Macro/FX***

China

- USD/CNY: PBoC Hu: Exchange rate reform has had a positive impact on Chinese economy; Helps to boost external balance and restructure the economy
- (CH) China Min of Commerce Liu Haiquan: China not looking for a trade surplus; It is not good for an overly large surplus in China's economy for the long run
- (CH) China govt may raise the cap for investment in A-shares and A-share funds by nation's pension funds to 25% from 20% - Shanghai Securities News
- USD/CNY: PBOC adviser Zhou Qiren: China may consider some modest Yuan weakening to support export growth - China Securities Journal
- (CH) China's 3 naval fleets take part in naval exercise on the South Sea - South China Morning Post

Australia/New Zealand

- (NZ) New Zealand economists expect a decline in fixed-term mortgage rates following yesterday's RBNZ comments that economy will likely grow more slowly than expected - Dominion Post

Japan

- (JP) Japan's Fin Min Noda: Supports the Kan administration; Sincerely looking at the proposal from the anti-deflation ruling party lawmakers
- (JP) Japan Econ Min Arai: No change in view that economy is recovering moderately; Cabinet is closely watching the markets

Other

- (CL) Chile Fin Min: global debt issuance was successful; $1B 10-year bond offering 5.7 times oversubscribed
- (UR) S&P Raises LT Rating of Ukraine by one notch to B+; Takes Ukraine off Watch Negative

***Equities***

Australia/New Zealand

- ORG.AU: Reports Q4 Rev A$203M v A$142M q/q, energy output +22%
- AWB.AU: Merging with GrainCorp in an A$856M deal; Combined market cap of A$2B
- TEL.NZ: Selling AAPT's consumer division to iiNet for A$70M
- ERA.AU: Reports H1 Net A$22.7M v A$8.5Me, Rev A$209.6M v A$188Me
- MQG.AU: Sees current quarter earnings slightly improved y/y; Sees uncertain market conditions
- TAH.AU: Tabcorp, Tatts Group and Ladbrokes were short listed yesterday by the Victorian Government for the state's monopoly wagering license - The Age
- CNP.AU: Has extended or refinanced $2.3B of the $2.7B of debt carried by its Super LLC joint venture - Sydney Morning Herald
- CCL.AU: Opened its A$120M new Bluetongue Brewery in New South Wales - Australian Financial Review
- TAP.AU: Reports H1 output +49%, Rev +55%

Japan

- Toyota Industries Reports Q1 Net ¥13B v ¥8Be, Op Profit ¥16B v ¥11Be, Rev ¥359B v ¥352Be
- Denso Reports Q1 Net ¥46B v ¥42Be, Op Profit ¥70.7B v ¥61Be, Rev ¥803B v ¥799Be
- TM: May begin offering ¥50K incentives to Japan buyers starting in October - Japanese press
- Rakuten to enter life insurance market through capital partnership with Airio Life Insurance - Japanese press
- Mizuho Securities Reports Q1 Net ¥470B v ¥129.5B y/y, Op loss ¥1.4B v loss ¥28.1B y/y

China

- Aluminum Corporation of China announces joint venture with Rio Tinto on Guinea Simandou Mine
- GOOG: Web search block in China could be the result of a technical glitch
- Industrial and Commercial Bank of China approached Chong Hing Bank Ltd about potential acquisition - Chinese press

Korea

- PKX: Denies that it is looking to cut prices in H2 as requested by the govt
- Hyundai Heavy awarded $1.4B order from a client in Kuwait
- Korea Exchange Bank will not extend the maturity of expiring debt by Hyundai Group companies including Hyundai Merchant Marine, Hyundai Elevator and Hyundai Asan; Hyundai comments they have no liquidity issues holding KRW1.2T in cash - Korean press

***Commodities***

- (CH) Chinese CISA Chairman: Iron ore prices remain a top concern; Reducing iron imports is an achievable goal; Need to strengthen China's voice in ore pricing
- Nisshin Steel may boost its production of coated steel - Japanese press

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