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StreetAccount Summary - Asian Market Recap: Nikkei (2.17%), Hang Seng (0.57%), Shanghai Composite (0.25%) as of 03:10 ET

Mar 07 ,2025

• Synopsis:

  • Asia equities ended lower almost everywhere Friday. Japan's Nikkei underperformed to finish down 2.2% while the Topix was 1.7% lower. Greater China boards all down despite another bright start in Hong Kong. Australia's ASX at six-month low, sharp losses for South Korea and Taiwan. Some bright spots in Southeast Asia and India. US futures higher but off peaks, Europe opened with losses. US dollar DXY index breaking below 104, yen strengthened but other Asia currencies again not taking advantage of the dollar's weakness. Treasuries mixed, CGB and JGB yields higher. Crude prices flat, precious metals lower, no firm direction in base metals.

  • Market volatility continued Friday with more significant losses in Japan and Australia, while Hong Kong see-sawed all day before ending lower. President Trump's announcement that he would postpone Mexico and Canada tariffs on goods covered by the USMCA agreement until 2-Apr failed to support markets with Wall Street again selling off overnight as worries grew of the impact tariff uncertainty and government job cuts would have on the greater economy. Today, China's foreign minister called Trump's tariffs 'evil' and criticized the US for 'two-faced' and 'hypocritical' acts, ratcheting higher rhetoric between Washington and Beijing over trade.

  • In regional developments, Japan economy minister Akazawa said the country was preparing to declare an end to long-term deflation while Reuters reported BOJ board members were watching wage hikes and food inflation carefully, and may hike rates again in May if conditions persist. China trade data showed Jan-Feb export growth fell by more than expected while imports unexpectedly contracted as Trump tariffs began. South Korea's President Yoon was released from custody after a court accepted a request to cancel his arrest.

  • Nissan Motor's (7201.JP) board is reportedly to meet on 11-Mar to discuss potential CEO successors. Bain targets listing of Seven & i's (3382.JP) supermarket business in around three years, according to reports. Star Entertainment (SGR.AU) has failed to find a deal to sell its stake in a Brisbane casino joint venture, bringing collapse a stage closer. SBI Holdings (8473.JP), SK Hynix (000660.KS) and UMC (2303.TT) are in negotiation over collaboration to build a Japan-based chip plant. Insignia Financial (IFL.AU) received two separate and revised non-bonding proposals from Bain Capital and CC Capital Partners. Zomato (543320.IN), Swiggy (544285.IN) and Zepto face an antitrust case from India's consumer products distributors that allege the food distributors have followed deep discounting practices.

• Digest:

  • China export growth slows in first two months while imports drop unexpectedly:

    • China's exports rose 2.3% y/y in first two months of 2025, missing Reuters forecast of 5.0% and came much slower from December's 10.7%. Exports extended growth streak since April-2024, however expansion lost momentum and was slowest since May amid escalating trade tensions with US. Imports unexpectedly contracted 8.4%, steepest drop since July-2023 vs expected 1.0% growth, following 1.0% rise in December, leading to a trade surplus of $170.5B, above consensus $142.4B and December's 104.8B. China combines trade statistics for January and February to smooth impact of LNY. Trump administration imposed additional 10% tariff on Chinese goods on 4-Feburary and hiked that to 20% earlier this week, meanwhile China carried out retaliatory tariffs on US energy and agricultural products. Still China Customs said exports of CNY3.88T ($540B) reached record high for the period, while Bloomberg noted prospects for its exports will be much more uncertain should Washington continue to hike tariffs and potentially slash key growth driver for Chinese economy. Commerce minister Wang Wentao has pledged stronger support for foreign trade and more measures to stabilize exports, highlighting diversifying its trade relations with more countries, in particular those under Belt and Road Initiative as well increasing services trade (Caixin).

  • China's foreign minister says Trump taking hypocritical approach to US-China ties:

    • China's foreign minister Wang Yi said during NPC Friday US should not "repay kindness with grievances", should not impose arbitrary tariffs on Chinese products and expect good relations at same time. Added it was fantasy that any country could suppress China and maintain strong relations with Beijing. Said President Trump was taking hypocritical approach to relations with China, noting Trump had called President Xi "brilliant" while imposing sweeping tariffs on China (NYTimes). Wang added such a two-faced approach is not helpful to stabilize ties while China will 'resolutely counter' US tariff pressure, adding major powers should "not bully the weak". Although direct talks between Xi and Trump not planned, analysts noted Wang's comments will add uncertainty to relations (Reuters). Analysis by Bloomberg noted Wang's tone throughout press conference was positive, touting China's breakthroughs in AI while questioning direction of US manufacturing and inflation.

  • China faces complex challenges from Trump's tariffs and trade actions:

    • Amid President Trump's tariff salvos, Chinese exporters face challenging decisions in how much they can absorb without losing business. Treasury Secretary Bessent this week downplayed inflation impact from tariffs, arguing Chinese exporters will have no choice but to absorb the tariffs by lowering their prices, an outcome that threatens to squeeze already thin margins and fan deflation pressures with China's export prices already in a sustained decline (Bloomberg). Prospect of protracted trade war also seen encouraging companies to shift operations offshore to avoid tariffs, posing risks to domestic employment. Meanwhile, Trump administration could be planning several more actions against China after it receives findings of trade review by 1-Apr. Press articles have analyzed Trump administration's early moves on China as part of an isolation strategy that China fears will narrow its export markets and constrain access to important technology, encouraging efforts by Beijing to court Trump with trade and investment deals (link).

  • South Korea court says President Yoon can leave custody:

    • Seoul's central district court Friday accepted President Yoon's complaint against his arrest over his imposition of martial law in December, releasing him from prison unless prosecutors challenge decision (Yonhap). Court said his 26-Jan indictment on insurrection charges had come hours after initial detention period had expired. Court also agreed with Yoon's lawyers over legality of investigation by Corruption Investigation Office, saying its investigation was outside its jurisdiction. Yoon's potential release does not mean trial is cancelled, he just may stand in it away from custody. Decision comes as Constitutional Court set to decide in coming days or weeks on whether to remove Yoon from presidency or reinstate him. General election will be held within 60 days if court confirms removal. Bloomberg noted opinion poll showed 60% of respondents favor Yoon impeachment while opposition leader Lee Jae-myung holds clear lead over opponents if election held.

  • Japan labor unions demanding stronger wage hikes than last year:

    • Nikkei cited a Rengo survey covering 2,939 unions, showing average wage hike demands of 6.09%, up from 5.85% last year, marking the first figure above 6% in 32 years. Base pay increases averaged 4.51% among 2,454 unions that disclosed this component. Small firms called for 6.57% in total increases, stronger than 5.97% last year. Demands are so far above Rengo's mission for at least 5% growth in total wages and at least 6% for small firms. Article noted large firms seeing unusually rapid settlements with unions and fully meeting demands. UA Zensen representing sectors such as logistics and restaurants reported 10 unions have fully achieved their targets. Signals for remaining negotiations are positive. A recent Teikoku Databank survey for January found 61.9% of firms anticipating pay raises in FY25, up 2.2 ppt from the prior year, marking the highest on record going back to 2007. Base increases planned by 56.1% of respondents was also a record high. Strong majority cited efforts to secure labor supply, against the backdrop of increasingly acute labor shortages and outweighing slower growth in corporate profits. Main risk lies in small firms' capacity to deliver wage hikes with labor share of profits reaching 70% according to the MOF corporate survey, much higher than 37% among large firms.

  • Notable Gainers:

    • +20.1% 1952.HK (Everest Medicines): cancer vaccine EVM16 clinical trial has dosed its first patient

    • +2.8% 4021.JP (Nissan Chemical): to launch up-to-¥3.00B buyback

  • Notable Decliners:

    • -14.6% 2618.HK (JD Logistics): reports FY earnings with gross profit below StreetAccount estimates

    • -9.1% 6055.HK (China Tobacco International (HK)): reports FY results with revenue below FactSet estimates

    • -4.7% 000100.KS (Yuhan Corp): receives notice of termination of technology transfer contract with Boehringer Ingelheim regarding treatment for steatohepatitis related to metabolic disorders

    • -4.0% 2160.HK (MicroPort CardioFlow Medtech): guides FY net income (CNY60-30M), net loss reduction between 87-94% y/y

    • -1.3% 3382.JP (Seven & i): provides update on management initiatives; to pursue IPO of 7-Eleven, Inc. by 2H26; to sell Superstore Business Group to Bain Capital for ¥814.7B ($5.37B); president & CEO Ryuichi Isaka to retire, effective 27-May

• Data:

  • Economic:

    • China

      • Jan-Feb trade balance $170.5B vs consensus $142.4B and $104.8B in December

        • Exports +2.3% y/y vs consensus +5.0% and +10.7% in December

        • Imports (8.4%) y/y vs consensus +1.0% and +1.0% in December

    • Australia

      • January household spending +0.4% m/m vs +0.4% in December

        • Household spending +2.9% y/y vs and +4.3% in December

  • Markets:

    • Nikkei: (817.76) or (2.17%) to 36887.17

    • Hang Seng: (138.41) or (0.57%) to 24231.30

    • Shanghai Composite: (8.55) or (0.25%) to 3372.55

    • Shenzhen Composite: (10.99) or (0.53%) to 2080.27

    • ASX200: (146.50) or (1.81%) to 7948.20

    • KOSPI: (12.68) or (0.49%) to 2563.48

    • SENSEX: 38.16 or +0.05% to 74378.26

  • Currencies:

    • $-¥: (0.35) or (0.23%) to 147.6380

    • $-KRW: (1.93) or (0.13%) to 1445.3900

    • A$-$: (0.00) or (0.31%) to 0.6310

    • $-INR: (0.11) or (0.13%) to 87.0087

    • $-CNY: (0.01) or (0.10%) to 7.2406