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StreetAccount Summary - Asian Market Recap: Nikkei (1.22%), Hang Seng (1.20%), Shanghai Composite (0.47%) as of 04:10 ET

May 30 ,2025

• Synopsis:

  • Asia equities ended mostly lower Friday. Hong Kong saw the steepest losses although ticked higher into the close with mainland China boards also down. Japan's Nikkei and Topix pared some of yesterday's gains, South Korea was lower alongside India. Southeast Asia down. Taiwan closed for a holiday. US futures edging lower, Europe slightly higher in the first hour of trade. US dollar higher, strength in the yen after inflation figures, AUD down on weak retail sales, quiet elsewhere. Treasury yields mostly higher, JGB yields lower, CGB yields lower on reports of stalled trade talks. Crude futures and precious metals down. Base metals mixed. Cryptocurrencies losses accelerating.

  • Asia equities sinking in the wake of the Trump administration winning a temporary block against yesterday's ruling that declared his reciprocal tariffs illegal. Analysts mixed in their response as several suggested the original ruling was the beginning of the end for country-based tariffs but others saying the administration will continue down the same path simply using sectoral tariffs or other means. Either way, the initial ruling complicates ongoing trade negotiations with Treasury Secretary Bessent admitting late Thursday US-China negotiations had stalled.

  • In other developments Friday, Tokyo core inflation rose to its highest since Jan-23. Japan's April industrial production contraction was smaller than expected, retail sales growth was robust and unemployment in line. South Korea industrial production and retail sales unexpectedly fell. Thailand's April manufacturing output rose but the government cut FY IP forecasts. Australia retail sales unexpectedly shrank in April.

  • Nippon Steel (5401.JP) plans to invest almost ¥870B ($6B) to reduce carbon emissions by introducing electric furnaces in three Japan-based factories. NTT (9432.P) is to launch a tender offer for a 31.6% stake in SBI Sumishin Net Bank (7163.JP) at ¥4,900 per share. Hyundai Motor (005380.KS) said it is preparing to increase the prices of all its US-sold vehicles to cushion the blow from Trump's tariffs. Lynas Rare Earths (LYC.AU) signed a deal with the Malaysia government for the supply of mixed rare earths carbonate in Kelantan.

• Digest:

  • Japan PM Ishiba calls Trump, June summit seen as the next deadline for trade agreement:

    • Japan Prime Minister Ishiba told reporters that he spoke with US President Trump on the phone and attained "deeper understanding" of their respective stances (Bloomberg). Frequency of direct conversations increasing as they eye a trade agreement in time for their expected meeting at the Canada G7 in mid-June. Article suggested the call adds to signs that momentum is building toward a deal, noting Trump's support for Nippon Steel's bid to acquire US Steel seen as a tailwind for Tokyo. Ishiba reiterated that cross-border investments are more important than tariffs. Two sides also exchanged views to enhance cooperation on diplomacy, security and economy. Similar to last week, Ishiba and Trump spoke just as Japan chief trade negotiator Akazawa returns to Washington for the next round of talks. Still no major breakthroughs expected. Recent press reports raised the prospects of Japan buying more US defense equipment as another potential bargaining chip (Nikkei). Higher unit prices suggested as a more viable proposal to reduce the US trade deficit when compared with agricultural produce. Akazawa refrained from divulging any implications from the US court ruling that blocked Trump tariffs declared under IEEPA.

  • Bessent says talks with China "bit stalled" as other countries react cautiously to court ruling:

    • Speaking to Fox News, Treasury Secretary Bessent said talks with China are a "bit stalled". Bessent didn't specify what aspects of talks have stalled, noting only that talks will continue in coming weeks. However, added that complexity of negotiations may require call between Trump and Xi. Development not altogether surprising given thoughts US-China talks were expected to be challenging following their tariff détente in Geneva. Regarding other negotiations, Bessent said he hasn't seen change in attitude by other countries following Wednesday's Trade Court ruling against tariffs. US trading partners reacted cautiously to the developments given still lot to play out, including appeals process and scope for administration to rely on other statutes (NY Times). EU officials said planned talks with US will go ahead as scheduled next week (FT) Japan PM Ishiba held another call with Trump to discuss tariffs and areas of cooperation, coming as Japan's top trade negotiator Ryosei Akazawa prepares to meet Bessent for fourth round of talks (Bloomberg). India's chief negotiator touted progress in trade talks and that he expects good outcome sooner than later (Reuters). Taiwan said it will continue efforts to secure a trade deal (Bloomberg).

  • Japan data mostly on the firmer side of expectations:

    • Tokyo core CPI rose 3.6% y/y in May, compared to 3.5% consensus and 3.4% in the previous month. Marks the highest since Jan-23. Ex-fresh food & energy inflation strengthened to 3.3% vs consensus 3.2% and prior month's 3.1%. Energy contributions were little changed, while the biggest driver remained non-fresh food. Rice prices still surging 93.2%, adding 0.29 ppt to the headline. Meaningful developments in the overhaul of government reserves program portends some relief, though limited size remains a question. Industrial production fell 0.9% m/m in April, less than 1.4% decline expected, following 0.2% rise in March. Slightly positive shipments left inventories lower. Going forward, METI survey projections point to a 9.0% rebound in May, followed by a 3.4% decline in June. Adjusted May guidance of +5.2% would still leave Q2 on a solid trajectory. Retail sales rose 0.5% m/m, matching expectations, rebounding from a 1.2% decline in March. Growth led by strong bounce in autos, adding to consistent gains in apparel. Unemployment rate also in line, remaining steady at 2.5% in April. Sequential decline in total employment offset by lower participation. Job offers to applicants ratio was steady at 1.26 in April, matching expectations. Marginal growth in job offers negated by higher applications.

  • Federal appeals court lets tariffs remain, as administration ponders alternative strategy:

    • Federal appeals court on Thursday temporarily stayed International Trade Court's (ICT) ruling blocking tariffs imposed under International Emergency Economic Powers Act (Bloomberg, Washington Post, Reuters). Those tariffs included 10% baseline tariff, 20% incremental tariff on China, and 25% tariff on non-USMCA compliant imports from Mexico and Canada. Discussions have turned to alternative tariff powers White House could employ with press sources noting Trump administration is preparing a two-fold strategy based on different statute (link). Administration considering authority under S.122 of Trade Act 1974, which allows imposition of tariffs of up to 15% for 150 days in order to address trade imbalances. During those 150 days administration would rely on S.301 of Trade Act that is aimed at addressing unfair trade practices, in order to launch investigations and devise specific tariffs for each country. That section was used previously to impose tariffs on China during Trump's first term. On Thursday Trade Advisor Navarro alluded to administration employing such a strategy. Trade experts argued alternative plan would still likely face legal challenges but appears to be on firmer legal ground than tariffs imposed under IEEPA.

  • US court rulings on tariffs risks prolonging global trade uncertainty:

    • US court rulings on tariffs inject fresh uncertainty into state of Trump administration's trade policy, though early takeaways noted they are unlikely to meaningfully alter state of play. Administration has avenues of appeal up to Supreme Court and there are other statutes giving president authority to impose tariffs (Reuters, Washington Post, Bloomberg). Some thought judicial process and questions surrounding legality of tariffs could complicate trade negotiations as other countries weigh whether to continue efforts to secure deal or stretch negotiations in hope of gaining leverage if courts rule against White House. Other sections of trade and tariff acts require investigations before administration can institute and maintain tariffs. Some of those sections are time limited, apply only at sector or country-level, or have cap on tariff rate that may be imposed. Analysts argue that could lead to more convoluted tariff scenario that prolongs global trade uncertainty. Another aspect relates to International Emergency Economic Powers Act (IEEPA) duties collected by the administration, which International Trade Court's (ICT) ruled must be refunded. Nomura estimates US has collected ~$40-60B in IEEPA tariff revenue since February, creating mildly stimulative scenario if they are returned.

  • Notable Gainers:

    • +6.3% 1093.HK (CSPC Pharmaceutical Group): in negotiations with third parties for potential license and collaboration deals

    • +4.6% 5105.JP (Toyo Tire): Activist Palliser reportedly acquires stake

    • +3.8% 2015.HK (Li Auto): reports Q1 earnings; revenue CNY25.93B vs guidance CNY23.4-24.7B and FactSet CNY24.93B

    • +3.5% 7276.JP (Koito Manufacturing): launches ¥50B on-market buyback

    • +2.9% 9432.JP (Nippon Telegraph & Telephone): NTT Docomo to launch tender offer for 47.7M shares of or 31.6% stake in SBI Sumishin Net Bank at ¥4,900/share

    • +2.8% 003670.KS (POSCO Future M Co.): clarifies media report; merger with SK On is "not true"

    • +0.2% 7202.JP (Isuzu Motors): 29.3M shares to be offered by way of purchase and underwriting and 4.4M shares by way of over-allotment

  • Notable Decliners:

    • -5.1% 544225.IN (Ola Electric Mobility): reports Q4 earnings; consolidated EPS (INR1.97) vs year-ago (INR1.14

    • -3.0% 005380.KS (Hyundai Motor): reportedly preparing to increase price of all US vehicles in attempt to cushion blow from tariffs

    • -1.9% 7267.JP (Honda Motor): April global vehicle production (11.9%) y/y to 279,094 units

• Data:

  • Economic:

    • Japan

      • May Tokyo core CPI +3.6% y/y vs consensus +3.5% and +3.4% in prior month

        • CPI excl. fresh food & energy +3.3% y/y vs consensus +3.2% and +3.1% in prior month

        • Overall CPI +3.4% y/y vs consensus +3.5% and revised +3.4% in prior month

      • April industrial production (0.9%) m/m vs consensus (1.4%) and +0.2% in prior month

        • METI survey projections +9.0% in May, (3.4%) in June

      • April unemployment rate 2.5% vs consensus 2.5% and 2.5% in prior month

        • Job offers to applicants ratio 1.26 vs consensus 1.26 vs 1.26 in prior month

      • April retail sales +3.3% y/y vs consensus +3.0% and +3.1% in prior month

        • Retail sales +0.5% m/m vs consensus +0.5% and (1.2%) in prior month

    • Australia April

      • Retail sales (0.1%) m/m vs consensus +0.3% and +0.3% in March

      • Building approvals (5.7%) m/m vs consensus +3.0% and revised (7.1%) in March

      • Private sector credit +0.7% m/m vs consensus +0.5% and +0.5% in March

    • New Zealand April

      • Building permits m/m (15.6%) versus +10.7% in prior month

  • Markets:

    • Nikkei: (467.88) or (1.22%) to 37965.10

    • Hang Seng: (283.61) or (1.20%) to 23289.77

    • Shanghai Composite: (15.96) or (0.47%) to 3347.49

    • Shenzhen Composite: (21.18) or (1.06%) to 1971.86

    • ASX200: 24.90 or +0.30% to 8434.70

    • KOSPI: (22.97) or (0.84%) to 2697.67

    • SENSEX: (223.52) or (0.27%) to 81409.50

  • Currencies:

    • $-¥: (0.17) or (0.12%) to 144.0090

    • $-KRW: +7.95 or +0.58% to 1379.3300

    • A$-$: (0.00) or (0.46%) to 0.6415

    • $-INR: +0.16 or +0.19% to 85.5749

    • $-CNY: +0.01 or +0.12% to 7.1946