Back to Daily DR Market Summary

StreetAccount Summary - Asian Market Recap: Nikkei (2.88%), Hang Seng (3.28%), Shanghai Composite (1.98%) as of 03:10 ET

Feb 28 ,2025

• Synopsis:

  • Asia equities ended firmly lower Friday with all major benchmarks posting weekly losses. Declines most severe in South Korea and on Japan's Nikkei boards while there was a substantial sell down in Hong Kong and Shenzhen. Other mainland China markets also fell sharply. Australia and India lower, Southeast Asia all down with more steep losses in Jakarta. Taiwan closed for a holiday. US futures flat, Europe opened with some steep losses. US dollar building on overnight gains, weakness in AUD, NZD; won down the most in Asia, yen weakened. Treasury yields down at the long end, JGB yields fell after BOJ said it would continue to taper bond buying despite higher yields. Crude oil, precious metals and industrials all down. Cryptocurrencies down substantially with bitcoin below $80K.

  • Asia markets selling off notably Friday with many benchmarks reversing week-to-date gains and finishing lower for the five days. The catalyst for the selloff was Trump's insistence overnight that 25% tariffs on Mexico- and Canada-made products would go ahead as planned next week, while China would see a further 10% tariff band on all goods. The comments triggered a spike in the US dollar and subsequent weakness in Asia currencies, especially in the trade exposed won and several Southeast Asia currencies. Late on, President Xi said China would take 'all necessary measures' against new US tariffs, ratcheting higher the war of words on trade.

  • BOJ Deputy Governor Uchida noted JGBs were continuing to have strong monetary easing effects and repeated that underlying inflation was tracking towards its 2% target. Tokyo core inflation eased by sightly more than forecast; Japan retail sales in January rebounded, industrial production saw shaper declines. Singapore producer inflation for January was higher than expected.

  • Nissan Motor (7201.JP) will announce a leadership shake up in March but fate of CEO Uchida is uncertain. Oil refiner Idemitsu Kosan (5019.JP) is to build a large-scale lithium sulphide plant to support Toyota's EV plans. US Commerce nominee Kessler says reports TSMC (2330.TT) chips went to Huawei a "huge concern". Star Entertainment (SGR.AU) said expects to receive liquidity offers to stay in business.

• Digest:

  • Trump says Canada, Mexico tariffs on track for 4-Mar, China tariff to double:

    • In a Truth Social post on Thursday, President Trump said that 25% tariffs on Canada and Mexico will proceed on 4-Mar and revealed 10% China tariffs that went into effect earlier this month will rise to 20%. Trump blamed insufficient efforts by those countries to stem flow of fentanyl into US and White House official said administration is viewing US overdose fatalities as key metric (Reuters, Bloomberg, FT). Trump's post cleared up some confusion following Wednesday's cabinet meeting where he gave early April start date for the Canada and Mexico tariffs, suggesting another one-month reprieve. Still some uncertainty whether Trump is open to last-minute deal before 4-Mar with White House official noting discussions between countries are continuing. Trump has also adopted softer tone towards China in signaling openness to a trade deal while press sources note China has indicated willingness to boost investmen in US. Still, dollar strength on Thursday viewed as a sign of growing market unease amid potential for tariffs to result in significant supply chain disruptions that heightens US inflation pressures.

  • Trump's China tariff hike draws attention to Beijing's response:

    • President Trump's decision to double tariff rate on China from 10% to 20% has inevitably drawn attention to how Beijing will respond (Bloomberg). Ministry of Commerce spokesperson issued generic response warning of countermeasures while major China media outlets on Friday made no mention of Trump's tariff increase. Recall that in response to Trump's initial 10% tariffs earlier this month, China announced retaliatory levies on US crude, agricultural machinery, cars and pickup trucks. However, there were thoughts these were mostly symbolic with Beijing opting for restrained approach to Trump's trade actions to avoid economic self-harm (Bloomberg). President Xi also told Politburo officials and State Council members this week to respond calmly to domestic and external challenges (Bloomberg). China and Trump administration officials have maintained high-level talks, Trump has adopted milder tone towards Beijing and President Xi, while press reports have noted both Trump and China officials open to trade and investment deals. Moreover, some see Trump's tariff hike reinforcing stimulus expectations at upcoming NPC.

  • China Politburo reiterates proactive macroeconomic policies ahead of next week's NPC:

    • President Xi chaired Politburo meeting Friday to discuss draft government work report to be submitted to next week's NPC (Xinhua). Readout regurgitated statements from December's Politburo meeting and CEWC. Reiterated China will implement more proactive macroeconomic policies to boost domestic demand and promote technological innovation. Country will stabilize property and stock markets, prevent and resolve key risks and external shocks, stabilize expectations and promote sustained economic recovery. SCMP noted Politburo meeting came just after President Trump's latest trade salvo on China, doubling originally outlined 10% tariffs on Chinese imports to 20% from next Tuesday. Analysts expected NPC to focus on technology, taking cues from local governments' work plans that highlighted importance of promoting tech sector while emergence of DeepSeek has bolstered confidence. Authorities also widely expected to dole out more fiscal subsidies to wider range of goods and services to boost consumption. Support for private sector likely to be highlighted too especially after President Xi's high-profile meeting with top-level entrepreneurs last week.

  • Tokyo inflation eases as expected, but food pressures continue to build:

    • Tokyo core CPI rose 2.2% y/y in February, a three-month low, compared to consensus 2.3% and follows 2.5% in the previous month. Ex-fresh food & energy inflation was steady at 1.9%. As expected, main drag came from lower energy contribution after electricity and gas subsidies were reinstated. Recent attention has focused on building food pressures. Cabbage prices surged 92.4% to push up fresh food segment. Rice prices were up 79.4%, equating to a 0.23 ppt contribution to the headline. Recent press reports highlighted notable strength in egg and banana prices reflecting broadening cost passthrough. Heavily weighted non-fresh food prices continued to accelerate, offset by slower growth in household/leisure durables and accommodation. Goods inflation slowed to 5.5% from 6.6% driven by utilities and fishery products. Translated to a notable drag from non-durable goods, overshadowing minor deceleration in durables and semi-durables. Closely watched services inflation was steady at 0.6%, though private sector services saw marginal drags from plateauing telecommunications fees and falling education prices.

  • Japan industrial production, retail sales mostly in line:

    • Industrial production fell 1.1% m/m in January, close to expectations of a 1.2% decline. Follows 0.2% slide in the prior month, marking the third straight decrease. Main drags were production machinery, electronic parts & devices and electrical/IT equipment. Shipments fell at a faster pace, leaving inventories up for the first time in three months. Core capital goods shipments tumbled 11.0% for a very weak start to Q1. Going forward, METI output survey projections pointed to a sharp rebound of 5.0% in February, followed by a 2.0% fall in March, implying mild growth in Q1, though adjusted February forecast of 2.3% suggestive of a more likely negative trajectory. Retail sales rose 0.5% m/m in January compared to consensus 0.6%, following 0.8% decrease in December. Marks a mildly positive start to Q1. Strength was led by autos and fuel. Food & beverages edged higher while apparel fell sharply. GDP implications remain blurred given the data are only nominal and widely acknowledged boost from inbound tourism. Hence, attention falls to household spending and more refined BOJ consumption activity data for clearer signals.

  • Notable Gainers:

    • +12.2% 6169.HK (China YuHua Education): reports FY earnings

    • +5.6% 9505.JP (Hokuriku Electric Power): raises FY25 guidance

    • +3.2% 6160.HK (BeOne Medicines): reports Q4 earnings with revenue ahead of FactSet estimates

    • +1.6% 7419.JP (Nojima): confirms discussions regarding the potential acquisition of Street Holdings, following reports that it is considering buying the marketing support firm for ¥13.0B

  • Notable Decliners:

    • -11.7% 1877.HK (Shanghai Junshi Biosciences): reports preliminary FY results with net income attributable below FactSet estimates

    • -9.8% 6185.HK (CanSino Biologics): reports preliminary FY net income attributable (CNY378.9M) vs prior guidance (CNY335.0-385.0M) and FactSet (CNY276.0M)

    • -7.3% 6808.HK (Sun Art Retail Group): expects to record CNY58M tax expenses provision due to supplier investigation; chairman Huang Ming-Tuan resigns, effective immediately

    • -4.8% VC2.SP (Olam Group): reports FY results with operational PATMI decline year-on-year

    • -4.7% 2689.HK (Nine Dragons Paper Holdings): reports H1 net income attributable CNY469.6M vs guidance CNY430-480M

    • -2.4% 1810.HK (Xiaomi): launches SU7 Ultra with starting price of CNY530K, lower than previously disclosed price of CNY815K

    • -1.1% 7182.JP (Japan Post Bank): Japan Post Holdings to launch 361.8M Japan Post Bank shares secondary offer

• Data:

  • Economic:

    • Japan

      • February Tokyo core CPI +2.2% y/y vs consensus +2.3% and +2.5% in prior month

        • CPI excl. fresh food & energy +1.9% y/y vs +1.9% in prior month

        • Overall CPI +2.9% y/y vs +3.4% in prior month

      • January industrial production (1.1%) m/m vs consensus (1.2%) and (0.2%) in prior month

        • METI survey projections +5.0% in February, (2.0%) in March

      • January retail sales +0.5% m/m vs consensus +0.6% and revised (0.8%) in prior month

      • Retail sales +3.9% y/y vs consensus +3.9% and revised +3.5% in prior month

  • Australia

    • January private sector credit +0.5% m/m vs consensus +0.5% and +0.6% in December

• Markets:

  • Nikkei: (1,100.67) or (2.88%) to 37155.50

  • Hang Seng: (776.97) or (3.28%) to 22941.32

  • Shanghai Composite: (67.17) or (1.98%) to 3320.90

  • Shenzhen Composite: (66.40) or (3.17%) to 2025.25

  • ASX200: (95.80) or (1.16%) to 8172.40

  • KOSPI: (88.97) or (3.39%) to 2532.78

  • SENSEX: (1,367.32) or (1.83%) to 73245.11

• Currencies:

  • $-¥: +0.52 or +0.35% to 150.3360

  • $-KRW: +9.61 or +0.66% to 1460.5100

  • A$-$: (0.00) or (0.38%) to 0.6211

  • $-INR: +0.03 or +0.04% to 87.3278

  • $-CNY: (0.00) or (0.05%) to 7.2825