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StreetAccount Summary - Asian Market Recap: Nikkei (0.64%), Hang Seng (0.01%), Shanghai Composite +0.41% as of 04:10 ET

Mar 11 ,2025

• Synopsis:

  • Asia equities ended lower almost everywhere Tuesday. Mainland China rallied into their respective closes to finish a few points higher and the Hang Seng finished flat. Elsewhere stocks sold off albeit with most off their lows by the end of the day. Developed Asia boards worst off with 1%-plus losses in South Korea, Taiwan and Singapore. Australia; Japan's main boards also saw steep losses. Southeast Asia and India outperformed. US futures positive after trading much lower first thing, Europe mixed in early trades. US dollar dipping in afternoon trades, AUD, NZD rallying, yuan notably stronger. Treasury yields mixed. Crude oil flat, precious metals also largely unchanged, base metals lower. Cryptocurrencies slightly higher.

  • Asia markets under substantial pressure first thing to follow Wall Street's steep selloff Monday and US futures that were pointing to more losses Tuesday. However, US futures rallied, dragging Asia bourses higher with them and leading to most main boards finishing well off their lows if not slightly higher. Nevertheless, with VIX volatility index at seven-month high and investors remaining in a risk-off mood, Asia equities struggling for positive momentum (ex Hong Kong's AI-related rally), pushing money to havens such as the yen.

  • In macro developments today, Japan January household consumption softer than expected but February machine tools orders rose; Q4 GDP revised lower from preliminary reading amid private consumption downgrade. Australia consumer confidence rebounded, underpinned by February's rate cut and reduced cost of living concerns; business confidence turned negative over outlook concerns. Philippines former President Duterte was arrested on an ICC arrest warrant on crimes against humanity charges.

  • Nissan Motor (7201.JP) CEO Uchida is to step down, according to NHK reports. XPeng (9868.HK) said it is considering large investments in humanoid robots that could increase to CNY100B ($13.80B). Foxconn (Hon Hai, 2317.TT) unveiled its first large language model and revealed plans to improve manufacturing and supply chain management. IndusInd Bank (532187.IN) admitted it expects a 2.35% decline on its net worth as of Dec-24 due to discrepancies in its derivative accounts found during an internal review.

• Digest:

  • Japan trade minister fails to gain assurances of US tariff exemptions:

    • According to Nikkei, METI minister Muto told reporters in Washington after meeting with US Commerce Secretary Lutnick and USTR Greer that he received no commitment to exempt Japan from tariffs on steel and aluminum products set to come into effect 12-Mar as well as planned auto duties. Muto said he asked for an exemption though the matter wasn't discussed further. Muto to continue negotiations, noting there was some acknowledgement of Japan's importance to the US. Article noted US is Japan's biggest export market, and while steel/aluminum make up a small share, the broader application of tariffs to metal products stoked concerns about impacts on Japanese businesses. Recalled Trump in his first term imposed 25% duties on steel and 10% on aluminum in 2018. Biden administration later granted a duty-free quota and individual companies could apply for exemptions for specific products. However, current Trump administration has indicated they would scrap carve-outs. Autos make up some 30% of exports to US and tariff impacts stand to be considerable. Furthermore, separate reciprocal tariffs set to be announced in April and could be implemented immediately.

  • Asia markets dip in wake of Wall Street selloff but finish off troughs:

    • Asia equity markets fell almost everywhere Tuesday after Nasdaq suffered its worst trading day since 2022 however most now off their troughs after US futures rallied. Regional Asia sovereign bond yields also tilted lower on fears of possible slowdown in the US. Nikkei 225 at almost six-month low, Australia's ASX at seven-month low, Hang Seng opened sharply lower before recovering with mainland China boards also rallying and ending higher. IT & internet names underperformed Hang Seng with tech-heavy boards in South Korea, Taiwan also lower. India's main boards have opened a few points down. Emerging Asia forex also under pressure despite steady US dollar, yen initially strengthened under haven demand (Reuters). Wall Street selloff triggered by fears tariffs, government spending cuts could trigger severe economic slowdown; President Trump called it 'period of transition', did not rule out recession (CNBC, Bloomberg).

  • Yuan wins temporary reprieve as doubts grow over US growth:

    • Offshore yuan strengthened in early Tuesday trade to re-approach four-month highs reached last Friday as doubts grew over US economic strength, Treasury yields fell and USD remained at multi-month lows. Economists said yuan's stronger trajectory reflect Beijing's recent focus on growth, as well as USD's weakness on back of stronger euro, reduced chances of Fed rate cut. Stronger yuan gives PBOC more room for maneuver with currency; daily fixing point versus Reuters consensus spread contracted steadily since peaking in January at around 1,500 pips to 622 Monday, 856 Tuesday. Analysts cited by Bloomberg said narrower delta between two indicates less depreciation pressure on yuan, while recent strength reduces urgency for PBOC to support currency to counter tariff threat. Other analysts said bank likely to keep daily fixing at sub-7.20 so long as Trump's tariff and Fed rate cut path uncertainty remains with room for further appreciation limited.

  • Speculator record long yen positions continue to grow sharply:

    • Nikkei cited CFTC data showing speculator long yen positions grew sharply to 136,651 contracts last week, equivalent to about JPY1.67T ($11.4B). Compares with 96K in the previous week, reaching a record high. Main notable drivers were concerns about the US economic outlook as well as President Trump's recent criticism of currency weakness in China and Japan as grounds for potential reciprocal tariffs. Aozora Bank suggested surprising magnitude apt to encourage other sectors to follow suit. Yen reached a five-month high versus dollar last week in the 146 range and momentum has extended further this week. However, views remain mixed with some thoughts that hedging costs will pose a barrier against sustained short USD/JPY positions. Also, renewed attention on tariff-induced inflation risk could lead to higher US yields, widening US-Japan differentials and put yen under pressure. Recent policy rhetoric has been generally supportive of yen strength driven by BOJ dynamics and seeking relief from transmission of higher import prices on inflation. Finance Minister Kato denied Japan is adopting a weak yen policy. Former BOJ Governor Kuroda last week asserted central bank is not intentionally guiding yen lower with monetary policy and any misunderstanding needs to be addressed (Reuters).

  • Trump administration in talks with China about setting up Trump-Xi summit in June:

    • Press sources noted US and China officials in talks about setting up a Xi-Trump summit in June (The Australian, SCMP). While both leaders have voiced interest in meeting, venue is an open question with China mindful of avoiding negative optics at White House summit and instead expressing greater willingness for Trump to visit Beijing. Efforts to initiate talks follows recent ramp in trade tensions that has seen Trump impose 20% tariffs on Chinese goods, prompting vocal criticism and retaliatory action by Beijing. However also a view that China's targeted responses to tariffs an attempt to leave door open to talks. Trump has taken softer tone in repeatedly praising his personal relationship with Xi while voicing openness to a broad trade deal. However, rhetoric belies series of White House actions aimed at countering China, including tariffs, tightened export controls, tougher restrictions on Chinese investment in US and efforts to curb China's dominance in shipbuilding. There is also threat of further actions with Trump in coming weeks set to receive findings of trade review he ordered in January.

  • Notable Gainers:

    • +17.1% 1860.HK (Mobvista): to discuss special dividend related to proposed disposal at 20-Mar board meeting

    • +14.9% 300896.CH (IMEIK Technology Development): unit Imeik International to acquire 85% stake in REGEN Biotech for $190M (CNY1.37B) cash

    • +13.5% 9863.HK (Zhejiang Leapmotor Technology): reports FY results with headline figures ahead of expectations

    • +8.9% 3064.JP (MonotaRO): reports February sales ¥24.26B, +11.0% vs year-ago ¥21.86B

    • +7.1% 9922.HK (Jiumaojiu International Holdings): guides FY revenue CNY6.07B vs year-ago CNY5.99B

    • +6.0% 9627.JP (Ain Holdings): reports 9M earnings with +14% revenue increase year-on-year

    • +3.4% 7532.JP (Pan Pacific International Holdings): reports February domestic retail same-stores sales +5.2% y/y

    • +2.1% 1801.HK (Innovent Biologics): reportedly gauging interest in potential licensing partnership for IBI363

    • +1.1% 3382.JP (Seven & i): Alimentation Couche-Tard calls for full engagement with Seven & i

  • Notable Decliners:

    • -26.0% 532187.IN (IndusInd Bank): notes adverse impact of 2.35% to net worth as of Dec-2024 from internal review of derivative portfolio

    • -19.1% 003620.KS (KG Mobility): to conduct capital reduction in par value of stock from KRW5,000/share to KRW1,000/share

    • -2.4% 5020.JP (ENEOS): to launch 534.9M JX Advanced Metals shares secondary offer for IPO, priced at ¥820/share

• Data:

  • Economic:

    • Japan

      • Revised Q4 GDP +2.2% q/q annualized vs consensus +2.8% and preliminary +2.8%

        • GDP +0.6% q/q vs consensus +0.7% and preliminary +0.7%

      • January household spending +0.8% y/y vs consensus +3.7% and +2.7% in prior month

        • Spending (4.5%) m/m vs revised +1.6% in prior month

    • Australia

      • March Westpac-MI consumer sentiment index 95.9 vs 92.2 in February

      • February NAB business confidence -1 vs revised +5 in January

        • Business conditions +4 vs +3 in January

  • Markets:

    • Nikkei: (235.16) or (0.64%) to 36793.11

    • Hang Seng: (1.35) or (0.01%) to 23782.14

    • Shanghai Composite: 13.67 or +0.41% to 3379.83

    • Shenzhen Composite: 7.15 or +0.34% to 2087.72

    • ASX200: (72.20) or (0.91%) to 7890.10

    • KOSPI: (32.79) or (1.28%) to 2537.60

    • SENSEX: (53.41) or (0.07%) to 74061.76

  • Currencies:

    • $-¥: (0.31) or (0.21%) to 146.9630

    • $-KRW: (7.25) or (0.50%) to 1452.6700

    • A$-$: +0.00 or +0.08% to 0.6283

    • $-INR: (0.09) or (0.10%) to 87.2387

    • $-CNY: (0.03) or (0.43%) to 7.2292