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StreetAccount Summary - Asian Market Recap: Nikkei +0.32%, Hang Seng (0.08%), Shanghai Composite (0.44%) as of 04:10 ET

Jun 10 ,2025

• Synopsis:

  • Asian equities traded mostly higher Tuesday although most benchmarks were off their highs by the close. Taiwan led the region amid strong gains for TSMC and several other high-tech stocks. Kospi was also higher but dragged back by retailers on proposed opening hours regulation. Japan's main boards ended higher, Southeast Asia mostly up. India flat. Hang Seng turned negative after the lunch break on negative US trade talks reports. US futures now lower, Europe pared early losses. US dollar stronger, won weaker on reports its state pension fund has stopped selling dollars. Treasuries down at the long end, higher at the short, Asia sovereigns largely flat. Crude a little higher, precious metals lower again, industrial metals lower. Cryptocurrencies consolidating overnight gains.

  • Asia markets turning negative over the day despite a bright opening on unsubstantiated reports negotiations in London between the US and China over trade were going badly despite earlier commentary that suggested the opposite. Bloomberg, cited officials on CCTV saying Beijing was being 'earnest' over trade talks but at the same time 'principled', and that the US should remove all negative measures against the country. Earlier, suggestions from a White House advisor said he anticipated a deal where US eases export controls and China releases rare earths in volume supported early positive sentiment.

  • In other developments, BOJ Governor Ueda repeated his readiness to tighten policy if the bank gains conviction inflation is approaching its 2% target. Australian consumer and business sentiment nudged higher but business conditions softened. South Korea's government revealed plans to force the mandatory closure of supermarkets on public holidays, weighing on several domestic retail names.

  • Toyota Industries (6201.JP) shareholders said to have told its AGM the buyout offer from the Toyota group undervalued the company. Geely Auto (175.HK) joined other major China autos in criticizing BYD's (1211.HK) aggressive price cuts. South Korea is set to reintroduce to require the mandatory closure of major supermarkets on public holidays on top of Sunday closures, Lotte Shopping (023530.KS) among the stocks to fall sharply. Hanwha Group has received US approval to up its stake in Austal (ASB.AU). Reuters reported Hyundai Motor (005380.KS) has a rare earth stockpile that could last up to a year. Taiwan Life Insurance (CTBC Financial, 2891.TT) said its losses more than doubled in May m/m due to the Taiwan dollar's rally against the USD hurt its foreign investments. A Wan Hai Lines (2615.TT) container ship exploded in the Indian Ocean causing several fatalities and the ship to be abandoned. Grab (GRAB) plans to sell $1.25B of convertible bonds to build up its cash pile for use in acquisitions amid signs takeover talks for GoTo Group (GOTO.IJ) have stalled.

• Digest:

  • US-China trade talks to continue Tuesday:

    • US and China trade talks in London to extend through Tuesday after representatives from both sides met for more than six hours Monday (Bloomberg, Reuters). Nothing substantive emerged from first day of talks with US officials describing them as fruitful. President Trump said he has received good reports from meeting though "China's not easy" to deal with. Export controls were a focus of talks after China and US traded criticisms of each other's curbs on rare earths and technology. Weekend reports noted China had begun to relax some rare earths restrictions. NEC Director Hassett told CNBC on Monday he anticipates deal where US eases export controls and China releases rare earths in volume. Media sources noted Trump authorized Bessent to relax some recent export restrictions targeting chip design software, jet engine parts, and chemicals. However, Hassett indicated advanced AI chip controls would remain. Talks have taken on sense of urgency after global automakers sounded alarm at shortage of rare earths magnets potentially disrupting auto production in matter of weeks (Reuters). Stakes are high with White House official telling Bloomberg Trump planning to restore tariffs back to April levels or number above global 10% baseline rate if no deal reached by August deadline.

  • BOJ JGB purchase discussions point to slower tapering next year, MOF may take up superlong slack:

    • In a Bloomberg interview Monday, former BOJ executive director Eiji Maeda suggested pace of JGB purchase reductions will likely slow to around JPY200B ($1.4B) per quarter in FY26 from the current JPY400B. BOJ will decide on its strategy at next week's MPM. Maeda indicated that attention is more on the end-point for purchases rather than the pace of tapering. The current FY25 plan would bring monthly buying to JPY2.9T and Maeda predicted reductions would cease after reaching a pace of around JPY2T, regarded as a reference point marking the lowest since the massive easing program was implemented in 2013. Expressed skepticism that BOJ will respond to specific concerns about the superlong sector, warning there could be no end once embarking on that path. Comments on broader trajectory fit with an earlier Reuters article. Nikkei subsequently reported BOJ intends to continue tapering in FY26, in line with market opinions, while leaving open the possibility of a slower pace. Cited market calls for somewhere between JPY200~400B per quarter. Onus to address superlong anxiety remains largely on MOF with attention heightening in the lead-up to a meeting with JGB primary dealers slated for 20-Jun. Markets already broadly expecting tweaks to bond issuance plans that would shift some supply from superlongs to shorter tenors. Reuters sources indicated buybacks of some outstanding superlong issues under consideration.

  • Early consensus flags potential for Japan to enter slight technical recession in H1:

    • A Nikkei narrow poll (n=10) found consensus looks for Japan GDP to shrink 0.1% q/q annualized in Q2 following yesterday's revised 0.2% contraction in Q1. Negative momentum seen marginal with non-annualized consensus at 0.0% q/q. However, seven out of ten estimates were actually positive, albeit all below a 1% pace. Composition sees private consumption growth remaining anemic while capex slows to marginal growth. Combines with private inventories swinging to a net drag with neutral external demand as prior strength in imports dissipates. Discussions largely focused on ongoing inflation pressures, apt to encourage consumers toward lower cost substitutes. CPI data showing rice prices virtually doubling over the year, accounting for a sizable portion of headline inflation. Recent overhaul of the government rice reserves framework has raised some hopes for a positive impact on consumer sentiment, though broader increases in food prices keeping cost-conscious mindset entrenched, particularly as inflation is eroding real employee compensation growth. Looking further ahead, article noted some expectations that real wage growth will turn positive from the autumn after government cost of living relief measures and wage hikes gain traction, though much depends on sufficient wage cost passthrough and an increase in the labor share of profits.

  • Japan LDP to pledge cash handouts in upper house election policy platform:

    • Yomiuri cited multiple LDP executive sources indicating the party will pledge cash handouts of several tens of thousands of yen (JPY10K = $69) per person as part of cost-of-living relief measures ahead of the upper house election in the summer. Funding seen coming from surplus tax revenues. Officials now set to determine income eligibility thresholds. Additionally, Prime Minister Ishiba called for a policy target of JPY1,000T nominal GDP by 2040, including average national income growth of at least 50%. This is about 1.6 times FY24 nominal GDP of JPY616.9T. Recall that LDP has been wary of calls for tax cuts from opposition parties as well as coalition partner Komeito. LDP has preferred cash handouts over tax cuts given the former could be implemented more quickly and degradation of fiscal position can be better controlled. LDP pushed back on revisions to consumption tax where revenues are earmarked for social welfare. LDP and MOF have been hawkish on fiscal policy amid debt risks exacerbated by rising bond yields. But minority government needs enough support from major opposition parties (all of which are fiscal doves) in order to pass legislation. Key stimulus measures will largely determine the size of an FY25 supplementary budget, which is at the root of volatility in superlong JGB yields. Ishiba has so far ruled out tax cuts covered by deficit bond issuance (Reuters).

  • Taiwan Semiconductor sales up 39.6% in May:

    • Taiwan Semiconductor (2330.TT) reported May sales up 39.6% y/y, lower than April's 48% increase and down 8.3% on a m/m basis. TSMC guided 2025 revenue growth of in mid-20% range, which CEO reaffirmed last week. Acknowledged risk of tariffs indirectly affecting demand and TWD's appreciation impacting gross margin, but it has not seen changes in customer behavior with AI demand remaining strong (Reuters). TSMC revenue growth over recent months fueled in part by chip stockpiling amid US tariff rollout. Taiwan exports hits record high in May with US-bound shipments surging 87.4% (Bloomberg). Forward leaning metrics have also been strong with April export orders rising 19.8% y/y (Reuters). President Trump imposed, then suspended, 32% reciprocal tariff on Taiwan. However, state of current negotiations remains unclear after Taiwan noted only that two sides remain in close communication (Reuters). Trump has also threatened separate duties on chips with Commerce Department having launched national security investigation into semiconductor imports on 1-Apr, potentially paving way for imposition of tariffs.

  • Notable Gainers:

    • +10.0% 603019.CH (Dawning Information Industry): Hygon Information Technology launches all-stock offer to acquire Dawning Information Industry at CNY79.26/share

    • +9.7% 064350.KS (HYUNDAI ROTEM): second K2 tank export deal reportedly nearing, possibly worth KTW9T

    • +6.2% 880.HK (SJM Holdings): plans strategic adjustments to Macau satellite casinos, targets acquisitions

    • +4.7% 9922.HK (Jiumaojiu International Holdings): launches up to HK$200M on-market share buyback under general mandate to run until next AGM

  • Notable Decliners:

    • -9.0% 023530.KS (Lotte Shopping Co.): South Korea reportedly to reinstate mandatory holiday closures for large retailers

    • -3.1% 3036.TT (WT Microelectronics): reports May consolidated revenue NT$78.33B, (2.4%) y/y

• Data:

  • Economic:

    • Australia

      • June Westpac-MI consumer sentiment index 92.6 vs 92.1 in May

      • May NAB business confidence +2 vs -1 in April

        • Business conditions 0 vs +2 in April

  • Markets:

    • Nikkei: 122.94 or +0.32% to 38211.51

    • Hang Seng: (18.56) or (0.08%) to 24162.87

    • Shanghai Composite: (14.96) or (0.44%) to 3384.82

    • Shenzhen Composite: (16.10) or (0.79%) to 2010.20

    • ASX200: 71.50 or +0.84% to 8587.20

    • KOSPI: 16.08 or +0.56% to 2871.85

    • SENSEX: (23.80) or (0.03%) to 82421.41

  • Currencies:

    • $-¥: +0.04 or +0.03% to 144.6490

    • $-KRW: +10.64 or +0.79% to 1364.9800

    • A$-$: (0.00) or (0.24%) to 0.6501

    • $-INR: +0.02 or +0.03% to 85.6530

    • $-CNY: +0.01 or +0.08% to 7.1867