Live updates, Bank of Japan, China PMI

Japan’s yen weakened after the country’s central bank kept interest rates steady and said it will allow more flexibility in its yield curve control policy.

The Bank of Japan said the target level of the 10-year Japanese government bond yield will be held at 0%, but will take the upper bound of 1% “as a reference.”

The news sent the yen down nearly 0.6% against the dollar, briefly breaching the 150 per dollar threshold.

The benchmark Nikkei 225 reversed earlier falls to rise 0.7%, while the Topix added 1.14%.

The BOJ also raised its inflation forecast for the next fiscal year, it now sees the core consumer price index rising 2.8%, above the 1.9% it predicted three months ago.

— Shreyashi Sanyal

China’s manufacturing activity logged an unexpected contraction in October, according to official data.

China’s purchasing manager’s index came in at 49.5 during the month against a Reuters poll estimate of 50.2. A PMI reading below 50 signifies a contraction.

The data arrives as recent economic readings have pointed to small signs of recovery in the world’s largest emerging economy.

China’s government and central bank have so far kept measures in place to boost growth, in order to meet Beijing’s annual growth forecast of about 5%.

— Shreyashi Sanyal

High interest rates are usually bad for tech stocks, and they’re now a key macroeconomic risk for “expensive” ones in particular — but two parts of the sector are in a good position, according to Bernstein.

One of them is “the cheapest sector in terms of [price-to-sales ratio],” it said.

It also named its top picks and refreshed its screens of global tech stocks.

CNBC Pro subscribers can read more here.

— Weizhen Tan

Meta Platforms saw its shares caught up in a broad tech sell-off last week — but several analysts remain bullish.

Meta’s stock fell 3.86% last week, although was trading over 2% higher Monday.

“I believe this tech sell off here, [when] we look back three, six months, I view this as more of a golden opportunity, not the time [for it] to head into hibernation mode,” Dan Ives from Wedbush Securities told CNBC’s “” on Thursday, in the midst of the market downturn.

Other analysts also weighed in on the outlook for the stock.

CNBC Pro subscribers can read more here.

— Amala Balakrishner

Japan’s retail sales climbed 5.8% in September from a year ago, a slower expansion compared with the 7% growth seen in August.

This is the first month that the growth rate softened after four straight months of accelerating growth, and was slightly lower than the 5.9% expected by economists polled by Reuters.

Total commercial sales came up to 50.35 trillion yen ($337.17 billion) in September, its highest level since March.

— Lim Hui Jie

Japan’s industrial production climbed just 0.2% in September compared to the previous month, according to preliminary figures from the country’s ministry of economy, trade and industry.

While this was a reversal from the 0.7% fall seen in August, the growth rate was sharply lower than the 2.5% month-on-month growth expected by economists polled by Reuters.

Industrial output fell 3.7% year on year in September, a softer contraction than the 4.4% drop in August.

— Lim Hui Jie

Oil prices fell on Monday as investors closely followed the Israel-Hamas war while readying for the Federal Reserve policy meeting later this week.

Brent fell 2.9% at $87.88 per barrel. The U.S. West Texas Intermediate futures declined 3.5% to $82.59 per barrel.

— Alex Harring, Lee Ying Shan

The likelihood of a fourth-quarter rally has “fallen considerably” over the past month, according to Morgan Stanley chief U.S. equity strategist Mike Wilson.

Wilson has been forecasting the S&P 500 ending the year at 3900, making him among the most bearish strategists on Wall Street according to CNBC’s Market Strategist Survey. While he noted in a Sunday note to clients that initial bullish sentiments waned in September — before picking up again this month on expectations of better third-quarter earnings and seasonal strength into the year-end — his lower estimate for the broad market index remains.

To read more about his call, click here.

— Hakyung Kim

Bank of Japan officials on Tuesday are expected to consider allowing longer-term bond yields to rise above a 1% cap amid a run-up in rates the central bank is trying to stave off, according to a report Monday.

Rising U.S. bond yields have spread globally and are pressuring their global counterparts, particularly since Federal Reserve Chairman Jerome Powell recently emphasized his commitment to fighting inflation. Allowing flexibility on previous yield curve caps could provide BoJ officials some breathing room, NikkeiAsia reported, citing sources familiar with the talks.

Rising U.S. bond rates have resulted in money flowing to the dollar, putting downward pressure on the yen and exacerbating inflation. Allowing some flexibility on the caps chases away speculators while helping Japan manage its own inflation issue.

The yen rose against the U.S. dollar following the Nikkei report, most recently trading at 149.21.

—Jeff Cox