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StreetAccount Summary - Asian Market Recap: ASX 200 (0.97%), Taiwan Taiex (1.23%) as of 04:10 ET

May 05 ,2025

• Synopsis:

  • Asian equities ended mixed Monday with volumes significantly down as many exchanges remained closed for a holiday. Of those open, Australia and Taiwan fell sharply while New Zealand and much of Southeast Asia traded higher. India is also trading higher. Japan, Greater China, South Korea and Thailand closed. US futures lower, Europe pared early losses in the first hour of trade with defense stocks advancing. Dollar DXY index below 100 again; Taiwan dollar surged for second day with notable gains for the won, ringgit, yen and yuan. Crude oil futures sharply lower after OPEC+ agreed to another large production hike. Precious metals well bid on dollar weakness, base metals mixed with copper higher but iron ore down.

  • Asia market news dominated by forex movements Monday as many equity markets remained closed. Most emerging Asia currencies reached multi-month highs just as President Trump softened his tone on China tariffs after saying the US will lower them 'at some point' to keep trade flowing. This boosted the yuan, which in turn also helped support the won, and especially the Taiwan dollar. The latter also boosted on reports today of Taiwanese domestic life insurance companies reversing forex hedging positions taken out at the beginning of April with profit repatriation and the 'sell America' trade blamed for other forex strength.

  • In tariff developments, Trump said he instructed USTR to impose a 100% tax on films made overseas; Japan's finance minister Kato said the country's Treasuries holdings would not be included in tariff negotiations but auto tariffs were proving a sticking point; Malaysia's PM Anwar said he believed the US would eventually lower the country's initial tariff rate but it would still impact growth. In other developments over the weekend, Australia's Labor Party was returned with an improved majority and Singapore's PAP also increased its share of the vote, joining Canada's Liberal Party's general election win last week in a pattern reflecting voter reluctance to change government in the face of global economic threats. Indonesia's Q1 GDP was slightly soft with underlying consumption disappointing; Singapore's PMI fell to a two-year low.

  • Samsung Electronics (005930.KS) said it will contest its $520M India tax bill and will use Reliance Jio's (Reliance Industries, 500325.KS) practice of importing network gear as precedent. The India government is considering its response over a court order scrapping JSW Steel's (500228.IN) takeover of Bhushan Steel four years ago. Hon Hai (2317.TT) reported a more than 25% increase in April revenue likely boosted by last minute orders ahead of US tariffs.

• Digest:

  • Trump says likely to lower China tariffs "at some point":

    • In an interview with NBC's Meet the Press, President Trump repeated that he is likely to lower China tariffs "at some point" to keep trade flowing. Follows de-escalation signal from China on Friday when it agreed to evaluate US offer to negotiate. Series of press articles have also highlighted how China has been quietly exempting an expanding list of US-made goods from tariffs as it seeks to ease impact of tariffs on vulnerable sectors (Bloomberg, Reuters). Meanwhile, press sources noted Beijing weighing fresh offer to address US concerns over fentanyl in bid to jumpstart trade talks. Publicly, both sides expressing note of defiance with Trump telling NBC's Meet the Press he was not inclined to unilaterally drop tariffs on China. China also coupled its offer to evaluate talks with US by repeating its call for US to unilaterally drop tariffs. Economic fallout from tariffs seen as incentive for both sides to engage with China factory activity contracting in April at fastest pace since Dec-2023. Meanwhile, 'de minimis' tariff exemption for cheap China imports ended on Friday with Shein and Temu having implemented price hikes for American consumers (Bloomberg). Articles have also discussed how chill in US-China trade has heightened supply chain disruption risks for US businesses.

  • Steel, aluminum and auto tariffs a sticking point in US-Japan trade talks:

    • US and Japan to begin working-level negotiations following talks last week according to Treasury Department (Reuters). However, Japan had more cautious take with Nikkei sources noting US presented framework of agreement for final deal but Japan objected to Trump administration's determination to keep steel, aluminum and auto tariffs in place. Japan PM Ishiba also expressed his strong disapproval of auto tariffs, leaving outcome of negotiations in state of uncertainty as two sides aim to reach agreement by early July when reciprocal tariff pause is set to expire. During his NBC interview Trump also did not rule out making tariffs permanent otherwise it would reduce incentive to build in the US (though he did say he would be flexible). Meanwhile, Japan Finance Minister Kato on Sunday downplayed notion of selling Treasuries as bargaining chip (Nikkei). Comes after Kato on Friday said Treasury holdings were among cards Japan holds in negotiations with US (though he did also say that whether Japan would use that card was a different matter altogether).

  • Asia currencies strengthening again but likely to remain volatile:

    • Asia currencies strengthened notably against US dollar Monday on President Trump's softer stance on China tariffs. Won and ringgit 1.4% stronger, Taiwan dollar (TWD) 3.7% stronger. Bloomberg reported exporters were repatriating dollar earnings but strength could also part of wider 'sell America' trade, also has reignited speculation some Asia countries considering revaluating currencies to gain US tariff concessions. Yuan at six-month high of 7.19 per dollar for a time, breaking down through 7.20 mark regarded as Beijing's 'red line'. Hong Kong dollar traded at strong end of allowed trading band. Yen and rupee also advanced as USD dollar DXY index fell below 100 again. Analysts cited by Bloomberg said Asia currencies likely to remain volatile until trade deals finalized but de-escalation in tensions broadly positive for regional forex. Noted relatively high turnover in Asia currency options, non-deliverable forwards in won, TWD indicating further potential gains. Yonhap quoted economist saying won to remain volatile with outcome of US-China trade talks critical to it movement.

  • OPEC+ plans to accelerates production hikes following Saturday's bumper increase:

    • Reuters sources said OPEC+ will accelerate oil production hikes further in July, August, September and October in aim to returning as much as 2.2Mbpd per day to the market by November. Comes after OPEC+ on Saturday agreed to raise output by another 411Kbpd from June. Similar production increase planned for July though sources said pace of coming production increases will depend on compliance. Production hikes part of Saudi Arabia's aim of punishing countries such as Iraq and Kazakhstan for poor compliance and overproduction (Reuters). In Dec-2024 OPEC+ agreed to restore the 2.2Mbpd by end of Sep-2026 but agreed in Apr-2025 to speed up this process from May-2025. According to Reuters calculation, OPEC+ has now restored 960Kbpd, representing 44% unwinding of the prior 2.2Mbpd in voluntary production cuts. OPEC+ production increases seen fanning supply concerns at a time of demand uncertainty. Crude under pressure in Asian trade Monday with WTI and Brent crude approaching four-year low. Comes as President Trump prepares to visit Saudi Arabia in coming days after previously demanding OPEC+ increase production in order to ease gas prices.

  • China manufacturers face challenges finding alternative markets to US:

    • US tariffs upending Chinese manufacturer business models in their first month of implementation with press reports highlighting challenges facing exporters in finding alternative markets. With Beijing and major internet platforms encouraging exporters to sell locally there are concerns increased competition in an economy held back by soft demand will worsen overcapacity and heighten deflation pressures (CNBC, NY Times). Economists say domestic prices must come down in order to absorb that extra supply, which will further pressure already slim margins and result in factory closures with implications for employment. Some Chinese exporters still aiming to ship to US but looking to sidestep tariffs via transshipment practises that Trump administration is looking to crack down on. FT highlighted how Chinese exporters being offered counterfeit certificates of origin before goods are then rerouted to US via Asian nations. Practise coming to attention of Asian governments with Malaysia and Vietnam pledging to act. Meanwhile, prospect of finding replacement markets in other countries also considered difficult for Chinese manufacturers given size of US, and some governments have signaled preparedness to counter dumping activity.

  • Notable Gainers:

    • +13.0% IMM.AU (Immutep): reports median Overall Survival of 17.6 months achieved in Cohort B of TACTI-003 Phase IIb trial

    • +9.4% GOR.AU (Gold Road Resources): to be acquired by Gold Fields at total cash consideration A$3.40/share

    • +1.7% 4DX.AU (4DMedical): wins commercial contract with Intermountain Health; terms not disclosed

  • Notable Decliners:

    • -18.2% PLY.AU (PlaySide Studios): co-founder Gerry Sakkas resigns from board and as creative director

    • -11.4% JAN.AU (Janison Education Group): delivery of NSW Selective High Schools and Opportunity Class testing at three testing venues postponed

    • -8.1% AHX.AU (Apiam Animal Health): reports 9M underlying NPATA A$5.4M vs year-ago A$5.9M

• Data:

  • Economic:

    • Australia April

      • MI inflation gauge m/m +0.6% versus +0.7% in prior month

    • Singapore March

      • Retail sales nominal y/y +1.1% versus (3.5%) in prior month

  • Markets:

    • Nikkei: Closed

    • Hang Seng: Closed

    • Shanghai Composite: Closed

    • Shenzhen Composite: Closed

    • ASX200: (80.20) or (0.97%) to 8157.80

    • KOSPI: Closed

    • SENSEX: 278.34 or +0.35% to 80780.33

  • Currencies:

    • $-¥: (0.75) or (0.52%) to 144.2220

    • $-KRW: (14.97) or (1.07%) to 1384.9230

    • A$-$: +0.00 or +0.42% to 0.6471

    • $-INR: (0.20) or (0.24%) to 84.3054

    • $-CNY: (0.00) or (0.01%) to 7.2706