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StreetAccount Summary - Asian Market Recap: Nikkei +0.49%, Hang Seng (0.74%), Shanghai Composite +0.03% as of 04:10 ET

Apr 24 ,2025

• Synopsis:

  • Asian equities finished mixed Thursday. There were modest gains for Japan's main boards, Australia and Singapore but the Hang Seng, Kospi, and Taiex all fell, albeit with limited losses. India's two main boards trading lower to break a seven-day winning streak, Southeast Asia benchmarks closed mixed. US futures extending losses, Europe opened lower. US dollar dipping late on, yen strengthening notably, little movement of note elsewhere. Treasury and JGB yields lower. Crude blends bouncing from overnight lows, gold paring yesterday's losses, base metals mixed.

  • Asia equities in a holding pattern Thursday with no fresh impactful newsflow on tariffs or trade negotiations. Some signs late Wednesday of de-escalation from the US side on reports it was considering cutting China tariffs by more than 50%, offset by President Trump saying if Beijing does not begin trade negotiations, he will set a final tariff rate in the next 2-3 weeks and China 'will have to cope with it'.

  • Trade negotiations underway with other nations: local media in Japan played down hopes of Tokyo winning a reprieve; South Korea's negotiations could involve shipbuilding, energy and may extend to the won; Vietnam is to target Chinese trans-shipments and aircraft purchases. More indications of the impact tariffs are likely to have on GDP growth with India the latest to suggest a 0.5% hit to GDP growth, and a Thailand minister suggesting the country will need $15B in stimulus to compensate. In macro developments, South Korea's economy contracted in Q1 as consumer weakness and a slowdown in exports hurt growth. Japan corporate services inflation remained above 3% in March.

  • Toyota Motor (7203.JP) said sales in North America jumped 7% y/y in March fueled by a last-minute rush to buy cars before tariffs set in. Nintendo (7974.JP) said it had received 2.2M applications for its Switch2 console in Japan alone, far exceeding its initial expectations. Hyundai Motor (005380.KS) has launched a US tariff task force; said it had moved some production to lines inside the US from Mexico. SK Hynix (000660.KS) sees profits rise more than 150% on AI demand and stockpiling ahead of US tariffs.

• Digest:

  • US-China trade deal prospects face familiar obstacles:

    • US-China trade headlines remain volatile following comments from Treasury Secretary Bessent on Wednesday (Bloomberg, FT, Reuters). Press sources had earlier noted Trump administration was weighing cutting China tariffs by more than 50%, following on from Trump's remarks day earlier flagging substantial tariff reduction. Bessent said both US and China tariffs would need to fall before negotiations, though cautioned Trump would not reduce tariffs unilaterally. There are other potential obstacles to any meaningful rapprochement with Reuters sources noting talks on fentanyl are at an impasse with Trump administration demanding more action and flagging non-tariff sanctions. FX manipulation another potential sticking point with Beijing seen pushing back against demands to allow free yuan movement given risks to economic and financial security (Nikkei). US says both sides engaging in lower-level talks though no traction yet on meaningful engagement with Beijing unwilling to accept US request for top-level negotiations. Other articles have discussed Xi's preparedness to gird for a prolonged trade war than risk being seen to have capitulated, leaving prospects for room to negotiate an off-ramp somewhat uncertain.

  • Bessent won't pursue currency target in Japan talks; US not giving tariff favors:

    • US-Japan trade talks resume in Washington on Thursday with Finance Minister Kato meeting Treasury Secretary Bessent. On Wednesday Bessent said US would not pursue any currency target and that it merely hopes for Japan to honor G7 commitment on FX manipulation (Bloomberg). Kato echoed Bessent in saying that wanted to base talks on existing FX agreements (Bloomberg). Fits with low expectations surrounding FX discussions after Japan officials reportedly determined to push back against any request to strengthen yen (Reuters). Dollar has also weakened substantially over recent months, an outcome seen lessening US appetite for immediate or significant action. Bessent said tariffs, non-tariff barriers and government subsidies among other topics on the agenda. However, NHK cited Japan government sources who revealed that during recent talks involving Japan's Economic Revitalization Minister Akazawa Ryosei, US officials maintained they could not grant any special favors to Japan, tempering hopes of Tokyo winning tariff reprieve on autos, steel and other items. Added some Japan government officials concerned US will dismiss Japan's request for lower tariffs while maintaining its position that Japan boost purchases of US autos and agricultural products.

  • Markets relieved at Trump's backdown on Powell and China (for now):

    • Markets remain gripped by volatility amid latest White House reversals. Press discussed how policy U-turns contributing to elevated market volatility, leaving Street with little clarity on potential end game (Bloomberg). Sources noted President Trump was convinced to back down on his attacks against Fed Chair Powell following counsel from senior White House officials concerned about potential for unnecessary market turbulence (Washington Post, Bloomberg). Monday's slide in stocks further encouraged to Trump to leave Powell in place. Meanwhile, Trump's willingness to slash tariffs on China was driven in part by recent meeting with retail executives, who warned him aboutsupply chain disruptions and empty shelves if tariffs remained in place. Still, markets remain at whim of White House unpredictability, underscored by latest cautious remarks on China by Treasury Secretary Bessent, Trump accusing Beijing of ripping US off on trade and his musing on prospect of more tariff announcements in coming weeks. Following recent pickup in concerns about risks to Fed independence, Trump also resumed his criticisms of Powell for keeping interest rates too high and that he may call the Fed chair (CNN).

  • BOJ rate hike expectations fall, but central bank sources say tariffs unlikely to derail outlook:

    • Bloomberg survey of 54 economists showed all respondents expect no policy change at next week's meeting. Rate hike outlook beyond April also receding with September expectations falling to 45% from 89% in prior poll. Twenty five percent predicted July and October as next likely months for a rate increase. No rate hike at all in 2025 was considered a prospect by 83% of respondents while 90% cited tariffs as reason for delay in BOJ rate increase. Survey also showed terminal rate forecast fell back to 1.00% from 1.25% in March survey, implying two more 25 bp rate increases. Yen appreciation seen as a factor lessening imperative for rate hike with BOJ mindful about impact of a strong currency on corporate earnings. At same time, Reuters report cited sources familiar with BOJ's thinking, who said central bank expected to signal at next week's meeting that tariffs will not derail current outlook on wages and inflation. Source said risks have heightened but not enough to derail baseline scenario of moderate economic recovery. Governor Ueda recently maintained basic stance that rate hikes to continue if underlying inflation continues to track to 2% target (Reuters).

  • South Korea economy contracts in Q1 amid political crisis, trade uncertainties:

    • South Korea's Q1 GDP contracted unexpectedly amid subdued domestic consumption, slump in exports and political uncertainty (Bank of Korea). Q1 GDP fell 0.1% y/y and 0.2% on q/q basis against forecast of 0.1% gain for both measures; construction investment contracted 3.2% q/q, capital investment dropped 2.1% and exports fell 1.1%. Private consumption also declined 0.1% from a growth of 0.2% in Q4, confirming weak monthly consumer confidence surveys during period caused by attempted imposition of martial law in December (FT). Although contraction modest, weakness will increase pressure on central bank to cut rates amid concerns over US tariffs, which some analysts fear could tip economy into downward spiral (Reuters). BOK reluctant to trim rates on concerns of weakening won further, prepared to observe outcome of trade negotiations. Separate report Thursday from Bloomberg hinted won could see support if currency included in trade negotiations, opening door for BOK to cut.

  • Notable Gainers:

    • +5.6% 7974.JP (Nintendo): received 2.2M applications for Nintendo Switch 2 in Japan alone, far exceeding its initial expectations

    • +3.1% 7327.JP (Daishi Hokuetsu Financial Group): Daishi Hokuetsu Financial Group and Gunma Bank to combine under holding company structure

    • +2.7% 6723.JP (Renesas Electronics): reports Q1 results with non-GAAP operating profit ahead of StreetAccount estimates

    • +1.7% 9901.HK (New Oriental Education & Technology Group): reports Q3 results with non-GAAP operating income ahead of FactSet estimates

    • +1.3% 6954.JP (FANUC Corp.): reports Q4 results with revenue and operating profit ahead of StreetAccount estimates; launches up-to-¥50B buyback; chairman Yoshiharu Inaba to retire

  • Notable Decliners:

    • -6.0% 688111.CH (Beijing Kingsoft Office Software): reports Q1 results with revenue and EBIT below FactSet estimates

    • -3.9% 7309.JP (Shimano): reports Q1 results with net income attributable below factset estimates; lowers H1 and FY guidance for net income attributable

    • -1.5% 000660.KS (SK Hynix): shares decline despite Q1 profit topping expectations, company maintaining forecast for HBM demand to double

• Data:

  • Economic:

    • South Korea Q1

      • GDP (0.2%) q/q vs consensus +0.1% and +0.1% in prior quarter

        • GDP (0.1%) y/y vs consensus +0.2% and +1.2% in prior quarter

  • Markets:

    • Nikkei: 170.52 or +0.49% to 35039.15

    • Hang Seng: (162.86) or (0.74%) to 21909.76

    • Shanghai Composite: 0.93 or +0.03% to 3297.29

    • Shenzhen Composite: (13.72) or (0.71%) to 1909.66

    • ASX200: 47.70 or +0.60% to 7968.20

    • KOSPI: (3.23) or (0.13%) to 2522.33

    • SENSEX: (258.72) or (0.32%) to 79857.77

  • Currencies:

    • $-¥: (0.90) or (0.63%) to 142.5410

    • $-KRW: +7.89 or +0.55% to 1435.2900

    • A$-$: +0.00 or +0.37% to 0.6384

    • $-INR: (0.16) or (0.18%) to 85.3425

    • $-CNY: +0.01 or +0.09% to 7.2935