| Chinese cities ease homebuying rules. Hong Kong is flooded with assets at fire sale prices. Japanese stocks are set to slump on Ishiba win. Here's what you need to know today. Three of China's largest cities eased rules for homebuyers, following through on the central government's latest efforts to prop up the embattled property sector. Trading hub Guangzhou became the first tier-1 city to remove all restrictions, saying it will stop reviewing homebuyer eligibility and no longer limit the number of homes owned. Shanghai and Shenzhen said they will allow more people to purchase residences in suburban areas and allow others to buy more homes. The moves came as the central bank said it would cut mortgage rates for millions of families. Here's how Xi's big week of stimulus aimed to draw a line under China's slowdown. The Shanghai Stock Exchange ran weekend stress tests after transaction problems at the end of last week affected a number of quantitative hedge funds. The exchange asked brokerages to participate in the tests after its systems struggled to cope with a surge in trading activity on Friday as stocks soared on China's stimulus announcements. Some hedge funds that had short positions in stock-index futures and long positions in equities were unable to sell their shares fast enough on Friday to meet futures margin calls because of the exchange issues that led to order delays. And there's little sign of buying fatigue among China's individual investors. New account openings surged over the weekend, with some brokerages offering 24/7 services to meet the demand. Japan's next Prime Minister Shigeru Ishiba is a self-proclaimed policy nerd on defense matters whose friends consider him to be an "oddball."
His surprise win at the fifth attempt to become leader of Japan's ruling party hands the reins of power to a political moderate who is popular with the public and wants to tackle rural economic decline without resorting to radical reform. He will also focus on cleaning up the ruling party's image and forming closer security ties with Asian partners including the prospect of forming an "Asian NATO." Opposition to Toyota Chairman Akio Toyoda has surfaced among some of the Japanese company's biggest investors, after a series of vehicle safety scandals gave rise to concerns about his leadership. As big shareholders begin to disclose why and how they voted during Toyota's annual meeting in June, their criticisms and fears are casting further doubt on Toyoda's chances of reappointment next year. In July, even Toyoda himself said his seat on the board could be at risk if shareholder support continues to slide. Get the full story here. Japanese stocks are set to slump today after ruling party elections raised expectations of further central bank interest rate hikes. Traders will also be closely watching events in the Middle East. Australian equity futures point to an early gain, while those in Hong Kong were flat. US contracts were steady after the S&P 500 closed slightly lower on Friday. A gauge of US-listed Chinese shares climbed 4% Friday after China unveiled its stimulus measures. Markets are showing signs of optimism into the final quarter of the year as signs grow on an improving global economic outlook following China's measures and as central banks begin cutting interest rates. China's stock market could be in for one last rally ahead of its National Day holidays, with recent gains buoying investor sentiment. Over the past week, Chinese equities added nearly $1.3 trillion to their market capitalization, while Hong Kong's market gained more than $500 billion. An additional boost could come from the weekend easing of home buying restrictions in Guangzhou, Shanghai and Shenzhen. That should provide a lift to property stocks. Any weak PMI data reported today is likely to be shrugged off. While China seems to be riding a wave of exuberance, Japan's stock market may face turbulence with a new prime minister incoming. Shigeru Ishiba supports the Bank of Japan's path towards policy normalization and his elevation has rattled markets. Japanese equity futures dropped 6%, and the USD/JPY has retreated to around 142 from over 146, as expectations for more BOJ rate hikes grow. BOJ Governor Kazuo Ueda has stated that monetary policy will still hinge on Japan's economic data and developments in the US economy. The upcoming Tankan survey will be a critical indicator of the health of Japanese businesses. Mary Nicola is a macro strategist for Bloomberg, based in Singapore. | 
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