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StreetAccount Summary - Asian Market Recap: Nikkei +0.80%, Hang Seng +0.60%, Shanghai Composite +0.42% as of 04:10 ET

Jun 04 ,2025

• Synopsis:

  • Asia equities finished higher Wednesday. South Korea outperformed post its decisive presidential election while Taiwan and other technology-orientated boards were also notably higher. Hong Kong and mainland China benchmarks higher, Australia and Southeast Asia all better. India building on early gains. US futures slightly lower, European markets opened higher. US dollar flat, Asia currencies a little weaker although the won rallied. Treasury yields higher at the short end, higher at the long; JGB yields higher across tenors. Crude futures lower, precious metals flat, base metals mixed.

  • Asia equities higher almost everywhere Wednesday on read through from a positive session on Wall Street. Sentiment also supported by a clear result in South Korea's presidential election, effectively ending six months of political upheaval following December's short-lived martial law. The won also advanced. US markets buoyed by unexpectedly strong labor data that showed the domestic American economy was holding firm amid tariff disruption, and hinting that non-farm payroll numbers this Friday will also be solid.

  • Trade tensions never far from headlines though. A Xi-Trump call could happen as soon as this week, according to several sources, and automakers warned over the impact of rare earths' shortage on production. In macro developments, BOJ Governor Ueda said he believed Japan's economy could withstand external headwinds. South Korea Q1 inflation slowed to a five-month low, backing the BOK's dovish stance. Japan services PMI a touch firmer than its preliminary read while India's service PMI was also robust. Australia Q1 GDP growth slowed by more than expected.

  • Toyota Fudosan (6201.JP) is set to conduct a tender offer for 226.4M of Toyota Industries (6902.JP) as per previous media reports but shares dipped sharply. City Developments (C09.SP) has agreed to sell its majority stake in the South Beach development to minority owner IOI Properties as it looks to reduce debt and regain investor confidence. Adani Enterprises' (512599.IN) airports unit secured a $750M in financing from a consortium of international banks that included Barclays and Standard Chartered. Hyundai Motor (005380.KS) sold its stake in Ola Electric (544225.IN) and Kia (000270.KS) cut its holding in a combined share sale worth INR6.9B ($80M).

• Digest:

  • South Korea electoral commission confirms Lee Jae-myung's victory:

    • Yonhap reported National Election Commission confirmed Democratic Party candidate Lee Jae-myung's victory in the presidential election, beating People Power Party's Kim Moon-soo with a vote split of 49.42% vs 41.15%. Lee was sworn in at a ceremony Wednesday morning, replacing Yoon Suk Yeol to end months of political turmoil since the failed attempt to impose martial law. Term commenced immediately without a transition period given the power vacuum after Yoon was impeached. Yonhap sources indicated Lee expected to appoint top campaign aide Kim Min-seok as prime minister. On policy, Yonhap said experts anticipate President-elect Lee to prioritize securing a favorable trade deal with Washington and implementing measures to revitalize the stagnant economy through supplementary budgets and the promotion of advanced industries. Incoming administration slated to conclude negotiations with the US before 9-Jul, when Trump's 90-day tariff suspension is set to expire. Yonhap sources said first phone call with Trump being arranged for as soon as Wednesday evening. Lee has vowed to implement an additional budget of at least KRW30T ($21.8B), on top of the KRW13.8T supplementary budget approved by the National Assembly last month. Other notable initiatives include a promise to double the KOSPI index beyond 5,000 and eradicate the so-called Korea discount.

  • BOJ Governor Ueda confident that domestic dynamics can withstand external headwinds:

    • In a speech Tuesday evening, BOJ Governor Ueda revealed more clarity in the Bank's thinking of Trump tariff risks and impacts. Outlined four main possible channels -- (1) decreased competitiveness of Japanese exports in the US market, (2) lower demand caused by uncertainties and Ueda added this is viewed as the leading risk factor, (3) global economic slowdown leading to contraction in trade, and (4) ripple effects from financial market volatility. Yet, on the outlook for domestic economy and prices, BOJ's current thinking is that the economy will be able to withstand such pressures, leaving a moderately virtuous wage-price cycle intact, owing to buffer from high corporate profits as well as household sector resilience built over the recovery to date. Still sees risks to the outlook as dual-sided and stressed that extreme uncertainties need to be kept in mind. Reaffirmed the core stance that policy adjustments will continue if economic developments track in line with forecasts. On the upcoming interim assessment for JGB purchase reductions, repeated takeaways noted earlier in parliament that most market views were supportive of continued tapering, calls for tweaks to the plan through Mar-26 were minor, and it was important for BOJ to prioritize predictability with a flexible approach to the strategy from Apr-26.

  • Australian GDP growth slows by more than expected:

    • Australia Q1 GDP growth fell to 0.2% q/q from 0.6% in Q4 and below consensus 0.4%, leaving yearly rate at 1.3% against forecast 1.5%. Main drags came from public demand (largest spending drop since Q3 2017), offsetting small positive contribution from private demand. Net exports were a small drag, though offset by rise in inventories as miners and manufacturers built up stocks. Household consumption maintained prior quarter's 0.4% growth, better than 0.2% growth forecast by RBA. However, consumption growth driven largely by summer surge in electricity usage with discretionary spending slowing over the quarter. Household savings ratio climbed to 5.2% from 3.8%, partially distorted by social payments related to adverse weather events. Employee compensation growth slowed. Nominal GDP growth fell to 1.4% from 1.6%, reflecting drop in terms of trade due. Prior to data, markets were pricing in ~70% chance of July rate cut with RBA's focus having shifted from inflation to supporting economy amid increase in tariff-related growth headwinds.

  • China rare earths export curbs expose risk to global supply chains:

    • US frustration at China's slow-walking licenses for rare-earth exports focusing more attention on risks to global supply chains posed by critical minerals (NY Times). With China accounting for 70% of global rare earths production, auto industry lobby groups sounding alarm on potential for curbs threaten to disrupt production. Reuters sources highlighted how delegations from India, Japan and Europe have been urgently seeking meetings with Beijing to push for quicker approvals of rare earth magnet exports amid concerns auto production could be impacted by end of summer. Following Geneva meeting last month Treasury Secretary Bessent revealed US was aiming for strategic decoupling (CNBC). However, rewiring rare earths supply chain seen as a costly and length endeavor. Press highlighted how Vice Premier He Lifeng orchestrated Beijing's reversal on rare earths in response to US tech curbs, underlining President Xi's willingness to leverage China's market dominance amid view that China's rare earths curbs were a factor in getting US to back down on tariffs at Geneva.

  • Notable Gainers:

    • +14.1% 1801.HK (Innovent Biologics): updates IBI363 phase 1 clinical study results in advanced non-small cell lung cancer at ASCO

    • +3.8% 6135.JP (Makino Milling Machine Co.): MBK Partners proposes to take Makino Milling Machine private at ¥11,751/share

    • +3.2% 033780.KS (KT&G Corp): reportedly looking at acquiring nicotine pouch company

    • +2.1% C09.SP (City Developments): reportedly to sell 50.1% stake in South Beach complex to IOI Properties for debt reduction

    • +1.8% 9983.JP (FAST RETAILING): reports May Japan Uniqlo same stores + online net sales +13.1% y/y

    • +1.4% 000270.KS (Kia Corp.): reports May global sales 269,148 units vs year-ago 264,699 units

  • Notable Decliners:

    • -11.9% 6201.JP (Toyota Industries): Toyota Fudosan to conduct tender offer for 226.4M Toyota Industries shares at ¥16,300/share

    • -9.7% 4023.JP (Kureha): to suspend buyback and establish new limit of up-to-10.0M shares for up-to-¥35.00B, to run from 4-Jun to 30-Sep

• Data:

  • Economic:

    • Japan May

      • May final services PMI 51.0 vs preliminary 50.8 and 52.4 in prior month

        • Composite PMI 50.2 vs preliminary 49.8 and 51.2 in prior month

    • Australia Q1

      • GDP +0.2% q/q vs consensus +0.4% and +0.6% in Q4

        • GDP +1.3% y/y vs consensus +1.5% and +1.3% in Q4

    • South Korea May

      • CPI +1.9% y/y vs FactSet consensus +2.1% and +2.1% in prior month

        • CPI ex-food & energy +2.0% y/y vs +2.1% in prior month

    • India May

      • Final Services PMI 58.8 vs flash 61.2 and 58.7 in prior month

        • Composite PMI 59.3 vs flash 61.2 and 59.7 in prior month

  • Markets:

    • Nikkei: 300.64 or +0.80% to 37747.45

    • Hang Seng: 141.54 or +0.60% to 23654.03

    • Shanghai Composite: 14.23 or +0.42% to 3376.20

    • Shenzhen Composite: 18.22 or +0.92% to 1999.61

    • ASX200: 75.10 or +0.89% to 8541.80

    • KOSPI: 71.87 or +2.66% to 2770.84

    • SENSEX: 214.61 or +0.27% to 80952.12

  • Currencies:

    • $-¥: +0.09 or +0.06% to 144.0910

    • $-KRW: (12.00) or (0.87%) to 1366.7000

    • A$-$: (0.00) or (0.04%) to 0.6460

    • $-INR: +0.23 or +0.27% to 85.9412

    • $-CNY: +0.00 or +0.02% to 7.1898