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StreetAccount Summary - Asian Market Recap: Nikkei (0.96%), Hang Seng (0.24%), Shanghai Composite +0.21% as of 03:10 ET

Dec 30 ,2025

• Synopsis:

  • Asia equities ended mixed Monday amid thin volumes. Greater China benchmarks turned higher after a flat-to-lower opening although the hang Seng slipped in late trade, New Zealand was higher but Australia lagged once again. Kospi recovered some ground, Singapore a few points higher. Japan lower as tech stocks weigh, Taiwan also down and India is now solidly red after opening slightly higher. US futures lower, Europe opened with small losses. Dollar flat, AUD and NZD notably stronger, yen weaker again. Treasuries mixed. Crude oil, precious and base metals higher at the open but have since turned negative.

  • Few catalysts of note today to change the recent cautious tone in Asia amid weaker currencies and uncertainty over trade and economic growth in China. Japan followed through from a selloff in tech stocks on Wall Street to trade lower, Taiwan was also a few points lower. South Korea's Kospi ended lower amid ongoing political turmoil.

  • Nissan Motor (7201.JP) stock fell sharply for a second day as the reported share transfer ratio of 5:1 continues to be met with disappointment. Vesync (2148.HK) has received a proposal to take the company private through a scheme of arrangement. A JejuAir (089590.KS) place crashed on landing at Muan airport Sunday killing all but two on board; stock sharply lower along with parent company AK Holdings (006840.KS). Singapore Post (S08.SP) named a new CFO following an executive overhaul in the aftermath of a whistleblowing scandal.

• Digest:

  • PBOC Governor Pan says China still has room to lower RRR:

    • Speaking to People's Daily, PBOC Governor Pan said there is still room to cut RRR compared with other major economies, adding average deposit reserve ratio of banking sector is 6.6% after RRR cuts of 50 bp each in February and September. However Pan did not reveal exact timing of such move (etnet) despite signaled reduction of 25 to 50 bp in RRR, depending on liquidity conditions, before end-2024 back in October (Xinhua). Pan said increasing intensity of monetary policy regulation, improving precision of monetary policy, effectively managing existing policies and making efforts to implement incremental policies will be next policy considerations. Came two weeks after December's Politburo meeting and CEWC that said China will carry out "moderately loose" monetary policy, including lowering RRR and policy rates when appropriate, to ensure ample liquidity. SCMP noted China's bond market likely to extend its bull run into 2025 amid growing easing bets as well and investors remain cautious of riskier assets due to concerns about Chinese economy. Some brokerages see 10Y CGB yield to drop below 1.5% at some point, which currently stands at record low of 1.697%.

  • Nikkei 225 posts highest year-end finish since 1989, megacaps grow in number:

    • Nikkei 225 closed at 39,894.54 on Monday in the final session for the year ahead of the New Year's holidays. An FT preview discussed Japan market dynamics with the benchmark set to finish 2024 well above the 1989-end level of 38,915.87. That was a record-high that stood until February and the market mostly tracked sideways for the rest of the year in the 38K to upper 39K range outside of the new all-time high 42,426.77 and subsequent rout to 31,156.12 in July. Article cited thoughts the recent blockbuster Honda/Nissan merger announcement may have renewed optimism among foreign investors, though the main surprise was that domestic investors drove this year's strength in a departure from typical dependence on foreign inflows. Broader optimism has been sustained by share buybacks. Nikkei highlighted the growth in the number of megacaps (bigger than JPY10T or $63B) to 18 companies in another record-high, compared to 10 at 2023-end and just three in 1989. Yet, article took a critical tone, noting the current number is still only one-ninth of those in the US. While Japan ranks third in megacaps behind US and China, story cited thoughts that Japan still lacks the innovation that would attract risk money. Japan total market cap is just 5.2% of the global market, the smallest on record going back to 2001. Also noted that none of the domestic companies in this category were established before the year 2000.

  • Yen and stock market volatility seen persisting next year:

    • Nikkei discussed yen developments this year and cited FX strategist views that volatility is likely to remain elevated in 2025. Yen expected to remain under pressure from ongoing wide US-Japan yield differentials, though some thoughts broader dollar strength won't provide as much of a tailwind for Japan. Foreign investor equity inflows expected to continue gradually on the back of corporate governance reforms and inflation themes. Capital efficiency/shareholder payouts and household rotation from savings to investment (via NISA) also mentioned. Yet, path entails uncertainties amid FX fluctuations as demonstrated by stock market performance in H2 this year. Tariffs also a key overhang, prompting shifts into areas insulated from China exposure, such as domestic demand. Prospects for wage hikes feed into the inflation theme. Nikkei poll of business leaders found bulk of respondents anticipating increases in the 5%-6% range next year. Toyota's announced ROE target of 20% seen setting the trend for the broader market (Nikkei). Confirmation of a record FY25 defense budget (Nikkei) reinforcing sector tailwinds.

  • Notable Gainers:

    • +25.7% 2148.HK (Vesync): Receives take private proposal from Victory III Co.; resumes trading

    • +16.4% 4825.JP (Weathernews): Earnings

    • +7.5% 3141.JP (Welcia Holdings): Reportedly to bring forward planned merger with Tsuruha HD

    • +7.0% 2171.HK (CARsgen Therapeutics Holdings): Meets primary endpoint for Phase II trial for satricabtagene autoleucel

  • Notable Decliners:

    • -9.1% 2685.JP (Adastria): Earnings

    • -2.4% 9435.JP (Hikari Tsushin): T-Gaia to launch tender offer to buy back 30.4% stake from current holders at ¥2,473/share

• Data:

  • Economic:

    • Japan

      • December final manufacturing PMI 49.6 vs preliminary 49.5 and 49.0 in prior month

    • South Korea

      • November industrial production (0.7%) m/m vs FactSet consensus +0.3% and 0.0% in prior month

        • Industrial production +0.1% y/y vs FactSet consensus (1.7%) and +6.3% in prior month

  • Markets:

    • Nikkei: (386.62) or (0.96%) to 39894.54

    • Hang Seng: (49.04) or (0.24%) to 20041.42

    • Shanghai Composite: 7.18 or +0.21% to 3407.33

    • Shenzhen Composite: (6.47) or (0.32%) to 2008.49

    • ASX200: (26.80) or (0.32%) to 8235.00

    • KOSPI: (5.28) or (0.22%) to 2399.49

    • SENSEX: (125.55) or (0.16%) to 78573.52

  • Currencies:

    • $-¥: +0.04 or +0.03% to 157.9100

    • $-KRW: (1.84) or (0.12%) to 1471.7100

    • A$-$: +0.00 or +0.27% to 0.6236

    • $-INR: +0.11 or +0.13% to 85.4900

    • $-CNY: (0.00) or (0.01%) to 7.2983