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StreetAccount Summary - Asian Market Recap: Nikkei +1.89%, Hang Seng +2.37%, Shanghai Composite (0.10%) as of 04:10 ET

Apr 23 ,2025

• Synopsis:

  • Asia equities finished higher across the region Wednesday. The strongest gains were seen in Taiwan, which saw its chip stocks gain substantially while there were solid gains for Japan, South Korea and Australia. The Hang Seng rose to a two-week high while gains on mainland boards were more mixed. Southeast Asia gained alongside India, which rose for a seventh consecutive day. US futures higher, Europe building on a strong opening. US dollar higher but off peaks, AUD and NZD leading Asia currency strength. Treasuries mixed, other sovereigns also mixed in Asia trading. Gains in crude futures. Gold and silver sold off. Base metals mixed. Cryptocurrencies building on overnight gains.

  • Three positive drivers behind Wednesday's move higher in equities. First, President Trump said he had no intention of firing Fed Chairman Powell and that his position was safe even if the Fed did not lower rates. Second Treasury Secretary Bessent said the trade war with China was 'unsustainable'; and third, Trump later said he would cut China's tariffs 'substantially' in any trade deal. Reports overnight the US was nearing framework trade agreements with India and Japan added to the constructive newsflow. The news sent recently under fire assets into sharp reversal with Treasury yields falling, the dollar appreciating, and equity markets seeing a significant relief rally, particularly in recent underperforming Taiwan and Japan benchmarks.

  • In regional developments, Japan flash PMI showed manufacturing activity shrank again with new orders contracting at the fastest pace in more than a year. Australia's flash PMI also showed overseas orders contracting but domestic demand kept the composite reading expansive. India's flash PMI hit an eight-month high with expansion accelerating again in both services and manufacturing. South Korea consumer sentiment improved but business confidence soured due to trade risks. Singapore inflation was unchanged at 0.9% in April, and Malaysia's inflation rate also dipped to a fresh four-year low 2.5%. Bank Indonesia held its base interest rate steady at 5.75% to protect the rupiah. Overnight, IMF reduced growth forecasts for most major Asian economies including China, India, and Japan due to tariffs.

  • The United Steelworkers union has told US Treasury Secretary Bessent it is "unalterably" opposed to Nippon Steel's (5401.JP) bid for US Steel. Hyundai Steel's (004020.KS) $6B US investment draws has drawn investor concerns over lack of detail over funding. Hyundai Motor (005380.KS) is set to launch 42 new models to cushion Trump tariffs and a slowdown in EV sales with a concentration on hybrids. IndusInd Bank (532187.IN) says it is to conduct an internal review of its microfinance business but denied it has engaged an external auditor. Woodside Energy (WDS.AU) is to assess the impact of US tariffs on its proposed Louisiana LNG project as it nears approval.

• Digest:

  • Trump says he has no intention of firing Fed Chair Powell:

    • Speaking to reporters on Tuesday, President Trump said he never intended to fire Fed Chair Powell and claimed the press "ran away with things" (Bloomberg, FT, Reuters). Trump repeated his criticisms of Powell and said that he'd like him to be more active in terms of lowering interest rates, but that even if Powell doesn't it would not result in his termination. Concerns about Trump firing Powell followed comments by NEC Director Hassett on Friday that Trump's team was studying whether it was possible to remove him. Trump had ramped up criticisms of Fed over past week, demanding rate cuts and accusing Powell of being too slow to ease policy. White House pressure campaign against Fed put more traction behind 'sell America' trade, fueling Monday's selloff in US stocks, Treasuries and dollar. Sell-side firms warned firing Powell risked inviting fresh market turbulence though there was also lingering skepticism Trump would carry out threat to remove Powell given financial repercussions that would follow. Weekend press reports also cited people close to Trump who said he was cognizant of the potential market damage from any attempt to oust Powell (NY Times).

  • Trump flags substantial China tariff cut if two sides strike deal:

    • Speaking to reporters on Tuesday President Trump signaled tariffs on China will come down substantially if two sides reach agreement. While tariffs would not fall to zero, Trump said he would be "very nice" with Beijing and saw no need to employ hardball tactics (Bloomberg). Trump expressed similar sentiments last week, where he voiced confidence about striking a deal with China (Reuters). His latest remarks follow Treasury Secretary Bessent's on Tuesday, in which he anticipated US-China deal in near future (Bloomberg, FT). Bessent said tariff standoff with China was unsustainable and that he anticipated situation to de-escalate, adding goal was not to decouple. At same time, Bessent conceded talks with China may prove difficult while Trump warned he would set terms of deal if no agreement from Beijing (Reuters). For its Beijing has indicated openness to talks but on condition of mutual respect while person familiar with government's thinking recently said China wanted willingness by US to address its concerns over sanctions and Taiwan (Bloomberg). Also some wariness on Beijing's part about rushing into leader-level talks, instead preferring negotiations to be conducted by lower-level officials before any Trump-Xi call.

  • White House close to general trade agreements with Japan and India:

    • Citing people close to White House, Politico reported Trump administration close to signing general agreements with Japan and India. However, deals fall well short of actual trade agreements and more likely to end up as MoUs. While Trump paused reciprocal tariffs for 90 days to allow for negotiations on trade deals, there was skepticism White House could engineer full trade agreements in such a short period of time. People acknowledged may take months to complete final deals given complexities involved. Unclear whether sketches of an agreement will ease market tensions though of importance is whether they will be enough to satisfy Trump and stave off tariffs. Among countries it is negotiating with, White House has been positive about trajectory with India after Vice President Vance hailing significant progress in trade talks. Situation with Japan little more complicated after PM Ishiba said there are limits to Japan's concessions while government has said it won't rush into a deal. Defense sharing costs/security arrangements, protected agricultural industries, currency management, and demands to restrict trade with China also among red lines for some Asian countries.

  • US-Japan talks on FX may prove underwhelming:

    • Japan and US resume trade talks in Washington onThursday with Finance Minister Kato meeting Treasury Secretary Bessent. FX will be on agenda though expectations have been tempered with Japan hoping merely to gauge US intentions after Nikkei reported MoF still unsure what US wants from talks. While Trump listed currency intervention as a non-tariff barrier in weekend Truth Social post, it is unclear how two sides can address that concern. Reuters sources noted Japan will push back against any request to strengthen yen, either via direct intervention or immediate BOJ rate hike, given concerns actions would run counter to G7 commitment on flexible exchange rate moves and it would also risk undermining BOJ's independence. As a result, FX strategists say agreement may only amount to finding common ground on language that stable FX moves are desirable, and that Japan should avoid intentionally weakening yen. Dollar has also weakened substantially over recent months with yen hitting highest since Sep-2024, which may lessen US appetite for immediate action. Some thought underwhelming outcome could be trigger for yen reversal, particularly with positioning data showing speculative yen longs recently hit record high (Bloomberg).

  • Chinese tech companies maneuver around US export controls on AI chips:

    • US-China tensions have broadened into technology space following Trump administration's decision earlier in April to impose export controls on NVDA H20 chips sold to China. Nikkei sources said Chinese tech companies ByteDance, Alibaba (9988.HK) and Tencent (700.HK) rushed to stockpile H20 chips worth billions of dollars in anticipation of Trump administration tightening export controls (The Information reported on this development in early April). The companies had requested roughly years' worth of supply valued at more than $12B, ideally by end of May. Actual number delivered fell short due to the curbs, but sources said several billion dollars' worth of chips were successfully shipped. To circumvent export controls, Chinese companies have also explored sourcing NVDA chips outside of China, setting up offshore subsidiaries or working with industry partners such as telecom operators. Furthermore, Reuters sources noted Huawei planning to begin mass shipments of its 910C AI chip to Chinese customers as early as May, allowing company to fill gaps left by NVDA. Sources said 910C achieves comparable performance to NVDA's H100 chips that were banned for sale to China by US in 2022.

  • Notable Gainers:

    • +17.9% 8595.JP (JAFCO Group): reports FY results with revenue ¥29.69B, +21% vs year-ago ¥24.44B; to launch up-to-¥5B buyback; guides DOE of 6% vs prior guidance 3%

    • +9.6% 3037.TT (Unimicron Technology): reports Q1 results with revenue ahead of FactSet estimates

    • +8.7% 4901.JP (FUJIFILM): subsidiary wins $3B (¥426.57B) manufacturing supply deal from Regeneron Pharmaceuticals

    • +8.0% 532281.IN (HCL Technologies): reports Q4 results; print seen by analysts as broadly meeting expectations, with FY26 guidance standing out as more constructive vs peers

    • +3.5% 763.HK (ZTE): reports Q1 results with revenue ahead of FactSet estimates

    • +2.6% 4684.JP (OBIC Co.): reports FY revenue and net income attributable ahead of FactSet estimates

    • +0.7% 4043.JP (Tokuyama): to acquire in vitro diagnostics and in vitro diagnostics pharma materials businesses of JSR for ¥82B

  • Notable Decliners:

    • -14.2% 2291.HK (Lepu Scientech Medical Technology): resumes trading; company sees realization of sales target uncertain

    • -1.4% 002049.CH (Unigroup Guoxin Microelectronics): reports FY net income attributable CNY1.18B vs preliminary CNY1.19B

• Data:

  • Economic:

    • Japan April

      • Flash manufacturing PMI 48.5 vs 48.4 in prior month

        • Services PMI 52.2 vs 50.0 in prior month

        • Composite PMI 51.1 vs 48.9 in prior month

    • India April

      • Flash manufacturing PMI 58.4 vs final 58.1 in prior month

        • Services PMI 59.1 vs 58.5 in prior month

        • Composite PMI 60.0 vs 59.5 in prior month

    • New Zealand March

      • Trade balance NZ$970M vs revised NZ$392M in February

        • Exports +19% y/y vs +16% in February

        • Imports +12% y/y vs +2.1% in February

    • Singapore March

      • CPI +0.9% y/y versus consensus +1.0% and 0.9% in prior month

        • CPI (0.1%) m/m versus 0.8% in prior month

        • Core CPI +0.5% y/y vs 0.6% in prior month

  • Markets:

    • Nikkei: 648.03 or +1.89% to 34868.63

    • Hang Seng: 510.30 or +2.37% to 22072.62

    • Shanghai Composite: (3.40) or (0.10%) to 3296.36

    • Shenzhen Composite: 14.65 or +0.77% to 1923.38

    • ASX200: 103.80 or +1.33% to 7920.50

    • KOSPI: 38.92 or +1.57% to 2525.56

    • SENSEX: 284.33 or +0.36% to 79879.92

  • Currencies:

    • $-¥: +0.25 or +0.18% to 141.8540

    • $-KRW: (6.63) or (0.46%) to 1423.5600

    • A$-$: +0.00 or +0.68% to 0.6409

    • $-INR: +0.32 or +0.37% to 85.4923

    • $-CNY: (0.02) or (0.25%) to 7.2939