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StreetAccount Summary - Asian Market Recap: Nikkei (0.25%), Hang Seng +0.12%, Shanghai Composite (0.10%) as of 04:10 ET

Mar 19 ,2025

• Synopsis:

  • Asia equities ended mixed Wednesday: Hang Seng finished near unchanged while mainland China stocks slipped moderately. Japan's Nikkei was lower but the Topix stayed positive. South Korea higher for third consecutive day on chip gains, India and Southeast Asia including Indonesia also advanced. Losses for Australia and Taiwan. US futures now lower after being higher early on, Europe's main boards opened slightly lower while Turkey's declines have triggered a trading halt. US dollar paring overnight losses, yen now notably stronger following Ueda comments post BOJ decision. Treasuries mixed, JGB yields mostly higher. Oil futures lower, precious metals mixed but gold still hovering near record high, base metals slightly better.

  • Investors waiting for Fed decision this evening and, probably more importantly, its accompanying statement before making their next move. Investors also mindful of geopolitical tensions in middle east after renewed Gaza airstrikes, and in Europe with strategists still trying to work out the ramifications of the Trump-Putin phone call, and in Turkey where the main presidential opposition leader has been arrested. Japan's main benchmarks in a polarized day's trading following BOJ's decision to hold base rate steady, steadying the yen for a time but JGB yields rose in a signal marketeers see the BOJ's next move higher a case of when not if.

  • China markets also listless with Hang Seng meandering around multi-year highs just as the latest BofA fund manager survey showed more investor exposure to China despite tariff overhang. However, a separate BofA equity strategy report also noted similarities between China's YTD stock market movement and that of 2015, warning of a correction could be imminent if the patterns repeat.

  • Few macro developments to excite traders either. Japan exports were at their strongest in nearly a year as stockpiling ahead of tariffs set it but was a tad below expectations; machine orders missed estimates and final industrial output data confirmed a preliminary decline. Post the market close in Jakarta, Bank Indonesia kept its base interest rate unchanged as expected by a slim majority of economists just as its stock market recovered from yesterday's sharp selloff. South Korea stocks boosted by news from Samsung Electronics (~005930.KS~) that it would work to improve shareholder value via acquisitions this year.

  • China has delayed the approval of BYD's (1211.HK) Mexico-based factory, according to the FT. Xiaomi (1810.HK) is to expand the size of a planned EV factory in Beijing, according to press reports. SK On (SK Innovation, 096770.KS) said it had won a contract from Nissan Motors (7201.JP) to supply batteries for its EVs made in the US. IndusInd Bank (532187.IN) raised INR110B ($1.27B) via certificates of deposit notes but at slightly raised interest rate at its first fund raising since acknowledging an accountancy scandal.

• Digest:

  • BOJ Governor Ueda reaffirms rate hike guidance while acknowledging trade policy uncertainties:

    • At the post-meeting press conference, Governor Ueda reiterated core guidance that policy adjustments will continue if economy and prices continue to trend smoothly, adding that developments are largely on track (Nikkei, Reuters). On inflation, acknowledged rising prices for rice and other products. While usually driven by temporary factors, remains cognizant of sustained pressures affecting household sentiment and inflation expectations as a risk scenario. Reaffirmed BOJ's view that underlying inflation remains below 2%, though added momentum is above 1%. However, most of the attention was on tariff risks, noting there is high uncertainty surrounding trade policies and corporate pricing behavior. While global macro impacts need to be closely monitored, discussions indicated board members need some more time to evaluate. For now, only noted that uncertainty is higher than it was at the prior meeting in January. Asked about the preliminary wage hike tallies, responded wage developments were "on track" though on the firmer side. Press indicated takeaways leaned dovish on the omission of forward guidance from the policy statement (Nikkei), though this was not discussed.

  • BOJ keeps rates unchanged as expected:

    • BOJ voted unanimously to keep the OCR unchanged at around 0.5%, matching expectations. No notable changes in the economic assessment. Continues to foresee growth momentum above potential and further evolution in a virtuous income/spending cycle. Nothing specifically to highlight strong wage hikes. Still expects underlying inflation to be consistent with the price stability target in the second half of the projection period. Already looking beyond high rice prices and government cost of living relief measures, implying that both are seen as temporary. Risks to the outlook mainly revolve around external trade and other policy impacts, keeping domestic uncertainties high. Also maintained recent pattern of shifting forward guidance to the quarterly Outlook Report rather than the policy statement. Market attention turns to Governor Ueda's press conference to shed light on how they perceive risks stemming specifically from US economic growth and tariff impacts. Latest consensus polls continued to show bulk of rate hike forecasts bunched in July, though risks starting to lean toward an earlier move and higher terminal rate.

  • Bank Indonesia holds base rate steady despite market turmoil:

    • Bank Indonesia (BI) Wednesday held its 7D repo rate unchanged at 5.75% Wednesday, as expected by slim majority of analysts with many forecasting 25 bps cut. BI lending facility rate held at 6.5%, deposit facility rate kept at 5.0%, also in line with expectations. Decision comes at fragile time for Indonesia economy amid two-month long budget deficit and investor exodus that sparked sharp equity selloff Tuesday. BI Governor Warjiyo said decision in line with support for rupiah, inflation forecasts amid high global uncertainty caused by US tariff policies. Said domestic consumption needs to be continuously encouraged. Analysts cited by Bloomberg prior to decision said market impact from speculation over finance minister Indrawati's future highlighted need for discipled fiscal monetary policy, said cut could have led to further rupiah outflow, increased volatility ahead of Fed meeting, and amid ongoing uncertainty over tariffs.

  • Samsung turns to acquisitions to boost valuation as more SK firms join government's value-up program:

    • Samsung Electronics (005930.KS) Co-CEO said Wednesday company is seeking major deals to drive growth following shareholder questions over strategy after company largely missed out on AI boom last year (Reuters). Han Jong-hee apologized to shareholders for poor stock price performance, pledged to catch up in high-bandwidth memory (HBM) chip race. Said 2025 would be difficult year for company because of policies in major economies, warned any acquisition would have regulatory issues, would have to tackle national interests but company determined to produce 'tangible results'. Stock reached four-year low in Nov-24 while rival SK Hynix seen stock price improve 26%; since then, SEC introduced share buyback plan worth KRW10T ($7.2B). Meanwhile, Korea Exchange data showed 124 companies, including 101 in main Kospi benchmark, have joined government-backed 'value-up' program to improve market valuation metrics. Total now represents 45.3% of market capitalization, exchange said (Yonhap).

  • BofA Asia FMS shows further recovery in China allocations, but strategists warn of imminent correction:

    • BofA Asia FMS showed extended improvement in sentiment towards China. Net country allocation ranking moved up to second place from third. Notable increase in proportion building exposure while those looking for opportunities elsewhere largely diminished. Views on the 12-month economic outlook added to moderate improvements after bottoming in January as monetary easing expectations remained elevated. Strong majority still anticipate China's response to Trump tariffs to come in the form of tit-for-tat retaliation, stimulus expectations climbed to a narrow majority, while larger minority expect currency devaluation. Household sector seen less frugal in favor of asset investments and discretionary spending. China themes dominated by AI/semis and internet. In contrast, Bloomberg cited BofA equity strategists in a Monday note, warning China may face a "meaningful correction soon" after 30% gains from the latest trough in a repeat of the 2015 cycle. Broader regional views were mixed with the 12-month economic growth outlook shifting negative to the weakest since Sep-22, though equity returns still almost unanimously positive. Sector rankings saw Asia ex-Japan software climbing to a survey high, while semis slipped to the middle of the pack and real estate remaining at the bottom.

  • Notable Gainers:

    • +4.4% 2057.HK (ZTO Express): reports Q4 results with headline figures ahead of FactSet estimates

    • +3.4% 011210.KS (Hyundai WIA): to sell 9.0% stake in WIA Machine Tools for KRW340B

    • +2.4% 772.HK (China Literature): reports FY results with revenue ahead of StreetAccount estimates

  • Notable Decliners:

    • -10.7% 2423.HK (KE Holdings): reports Q4 results with adjusted EPADS and adjusted EBITDA below StreetAccount estimates

    • -5.8% 9868.HK (XPeng, Inc.): reports Q4 results with non-GAAP EPADS and revenue below FactSet estimates

    • -4.8% 2678.JP (ASKUL Corp): reports 9M results with year-on-year decline in operating income

    • -4.5% 762.HK (China Unicom (Hong Kong)): reports FY results with EBITDA below StreetAccount estimates

    • -0.8% 3382.JP (Seven & i): Alimentation Couche-Tard reportedly met privately with key Seven & i Holdings shareholders in attempt to push the company to engage in takeover talks

• Data:

  • Economic:

    • February trade balance ¥584.5B vs consensus ¥688.3B and revised (¥2,736.6B) in prior month

      • Exports +11.4% y/y vs consensus +12.6% and revised +7.3% in prior month

      • Imports (0.7%) y/y vs consensus +0.8% and revised +16.2% in prior month

    • January core machinery orders (3.5%) m/m vs consensus (0.1%) and revised (0.8%) in prior month

    • March Reuters Tankan manufacturers sentiment index -1 vs +3 in prior month

      • Service sector index +25 vs +30 in prior month

    • Singapore Q4

      • Unemployment Rate (Final) 1.9% versus consensus 1.9% and 1.9% in prior quarter

  • Markets:

    • Nikkei: (93.54) or (0.25%) to 37751.88

    • Hang Seng: 30.57 or +0.12% to 24771.14

    • Shanghai Composite: (3.33) or (0.10%) to 3426.43

    • Shenzhen Composite: (8.53) or (0.40%) to 2114.13

    • ASX200: (32.10) or (0.41%) to 7828.30

    • KOSPI: 16.28 or +0.62% to 2628.62

    • SENSEX: 218.50 or +0.29% to 75519.76

  • Currencies:

    • $-¥: +0.07 or +0.05% to 149.3500

    • $-KRW: +4.28 or +0.30% to 1453.8800

    • A$-$: (0.00) or (0.36%) to 0.6339

    • $-INR: (0.05) or (0.05%) to 86.5173

    • $-CNY: +0.01 or +0.09% to 7.2345