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StreetAccount Summary - Asian Market Recap: Nikkei (0.66%), Hang Seng (1.07%), Shanghai Composite (0.37%) as of 04:10 ET

Aug 01 ,2025

• Synopsis:

  • Asian equities ended lower Friday to complete a poor week. South Korea led the region down on reports of a hike in capital gains and corporation taxes. Taiwan's Taiex also ended down on a disappointing tariff rate and weakness in tech stocks overnight. Japan's Nikkei fell but the Topix ended slightly higher. Australia and Singapore closed lower, most of Southeast Asia was also down although Jakarta was a standout gainer. India trading a few points down. US futures indicate a lower opening, Europe down steeply in the first hour. US dollar DXY index maintaining overnight gains and hovering near 100, some strength in Asia majors. Treasury yields edging higher, JGBs mixed. Precious metals now lower, crude oil contracts a point or two higher. Base metals mixed. Cryptocurrencies lower.

  • Asia equities capped a down week with more losses as investors digested the latest developments in the US tariff program that will see 15-20% tariffs imposed on most Asia counties. Ex Asia, Canada and Brazil the worst hit with Canada's fentanyl-related tariff raised to 35% and Brazil's to 50%; in Asia, Myanmar and Laos were hit with 40% import duties. Negotiations between Washington and New Delhi said to have broken down over India's commercial ties with Russia and its reluctance to open its agriculture market to US goods. Taiwan's president said he was confident he could negotiate the island's 20% rate lower. Japan's top trade negotiator Akazawa said he believed Japan can secure 15% tariff for planned chip tariffs.

  • In economic developments, Taiwan's economy grew almost 8% y/y in Q2 on surging technology exports. South Korea July export growth was ahead of expectations on strong chip demand but there was more evidence of frontloading ahead of tariffs. Asia PMIs showed factory activity in northern tech-leaning countries deteriorated to pandemic-era lows but the ASEAN region expanded. China's private sector PMI unexpectedly fell back into contraction while India's final reading was revised slightly lower from its flash estimate. Indonesia exports hit a four-month high but inflation also increased to almost 2.4%, still well inside the central bank's target range.

  • Alibaba (9988.HK), JD.com (9618.HK) and Meituan (3690.HK) pledged to end their price war following warnings from Beijing. TEPCO (9501.JP) posted a $5.8B Q1 loss on costs associated with the Fukushima nuclear plant decommissioning. Tokyo Electron (8035.JP) Q1 operating profit missed expectations company said results were in line with its own projections; Chinese chip makers scaling back legacy investments, changing NAND investment plans. OCBC (O39.SP) trimmed its FY 2025 outlook amid lingering tariff uncertainty despite posting in line Q2 profit.

• Digest:

  • White House issues tariff rates for trading partners:

    • White House issued tariff rates for several countries, including those already announced and new duties for nations yet to strike agreements (Reuters, FT, Bloomberg). Baseline tariff rate of 10% remained for most countries not on list despite Trump previously suggesting new floor rate of 15%. White House official said 10% tariff applies to countries that US has trade surplus with, ~15% for those with agreements or which US runs modest deficit with, and higher duties for counties yet to strike deals and which US has large deficits with. Tariff rates take effect in seven days, leaving room for negotiations with US official flagging more trade deals in pipeline. As threatened Trump hiked Canada tariff rate to 35% from 25%, effective from 1-Aug though still applicable only to non-USMCA goods (Bloomberg). Factsheet cited fentanyl crisis though Trump has also criticized Canada's tariffs on American products like dairy. Earlier, Trump extended Mexico deadline by 90 days with Mexico to continue paying 25% fentanyl tariff. Switzerland among hardest hit with 39% tariff. Across Asia, tariffs for Taiwan (20%), Thailand, Malaysia and Cambodia (19%) were all below 'Liberation Day' rates. As foreshadowed, Trump imposed 25% tariff on India amid frictions over market access and purchases of Russian crude.

  • Trade uncertainty will continue to play out:

    • Tariff announcements won't put immediate end to trade uncertainty with some negotiations still playing out. Taiwan believes 20% tariff will be temporary until trade deal is reached with two sides reportedly drafting joint statement (Reuters, Bloomberg). Facing 25% tariffs, India vowed to defend national interests (Reuters) but determined to keep trade talks on track (Bloomberg). US also continuing talks with China and Mexico. Additionally, trade focus will extend to sectoral tariffs with probes into semis, pharma, critical minerals and other products expected in coming weeks. For Asia, lot of focus will be on semiconductors, which comprise sizable proportion of Taiwan, South Korea and Japan exports. As of late Trump has not indicated what chip tariff will be though Japan's Akazawa voiced confidence of country securing a 15% rate (Nikkei). Trump has threatened 200% tariffs on pharmaceuticals, which could impact major exporters like South Korea and India. However, market discounted threat to degree after Trump gave 12-18-month implementation timeframe. Some uncertainty also surrounds when auto tariffs on Japan and South Korea will reduce to 15% from current 25% (Bloomberg).

  • Yen underlines sensitivity to BOJ rhetoric:

    • Yen strengthened in the Tokyo session Friday though only reversing a fraction of the overnight selloff vs dollar. Turning point generally followed renewed verbal intervention from Finance Minister Kato at a regular press conference, expressing alarm over FX movements, including those driven by speculators (Reuters). Notably greater attention on the initial catalyst for yesterday's selloff. FX market was highly sensitive to BOJ Governor Ueda's remarks Thursday that he didn't see current FX levels having an immediate impact on the inflation outlook. Nikkei cited market participants describing the comment as a 'gaffe' that stands to exacerbate inflation pressures via import prices and undermine expectations for a gradual recovery in private consumption. Surprising rhetoric was said to have triggered memories of April last year, when Ueda answered in the affirmative to a question about whether BOJ could shrug off a USD/JPY level of 155, which subsequently sent levels to 160 in the following Monday and ultimately prompted FX intervention. Article suggested market's bearish bias stems from Japan's negative real policy rate, by far the lowest in the G3 and also including UK and Switzerland. Yen faces further risk with the upcoming US payrolls report, whereby a solid headline stands to cement the 150 handle.

  • Tokyo Electron reverberations raise questions over tech outlook:

    • Japan earnings sentiment was dampened Friday by Tokyo Electron (8035.JP) closing 18.02% lower Friday after hitting limit-down on the open (Nikkei). Price action came in the wake of Thursday's post-close earnings that included an FY guidance downgrade. Headline effects were accentuated by the contrast from a prior projection for record net profits swinging to a y/y decline. Share price clearly broke below its 200-day moving average, while the drop posed a drag of 470 pts in the Nikkei alone. Played into concerns about the cutting-edge tech sector outlook as revisions partly reflected delayed capital investment among client manufacturers of logic semiconductors. Some of this also thought to be driven by indirect tariff effects. Weakness was compounded by broader tech sector weakness with many Japan names also falling sharply. Yet, selling pressure was narrowly confined as most sectors advanced and Nikkei would have closed higher excluding the drag from Tokyo Electron. Some thoughts that themes in transition, taking profits from exporter names that surged in the wake of the US-Japan trade deal and rotating into domestic demand. Overall, article cited Okasan Securities analysis showing Topix beat rates for Feb/Mar FY-end companies were at 25.6% as of Thursday, above the 10-year average of 24%.

  • China S&P Global manufacturing PMI unexpectedly contracts in July:

    • China S&P Global manufacturing PMI, previously known as Caixin PMI as the private survey, was 49.5 in July, missing expectations 50.2 and down from 50.4 in prior month. Data was in contraction for second time in three months. Manufacturing output declined in July, marking second time that production has fallen since Oct-2023. There was slower increase in new orders as some respondents indicated weak external demand had negatively affected sales. Notably new export orders dropped for fourth straight month and deepened from June. Manufacturers continued to cut headcounts amid falling production and stable backlogs. Average input prices rose for first time in five months on higher raw material costs however companies still lowered selling prices amid intense competition. Supply chain conditions continued to deteriorate amid shipment delays and supplier shortages. Meanwhile purchasing activity expanded and business confidence improved on hopes of better economic conditions and more promotion-induced sales. Results in line with official NBS reading released yesterday that showed factory activity deteriorated at worst pace in three months, while Bloomberg noted adding to concerns about economy's momentum in H2 after solid growth in first six months of 2025.

  • Notable Gainers:

    • +6.2% 2914.JP (Japan Tobacco): reports Q2 earnings; revenue ahead of FactSet estimates

    • +5.5% 8267.JP (AEON Co.): reports Q1 earnings; confirms FY guidance

    • +3.5% 9501.JP (Tokyo Electric Power Co. Holdings): reports Q1 earnings

    • +1.3% 968.HK (Xinyi Solar Holdings): Chinese polysilicon firms reportedly in talks to create CNY50B fund to shut one third of production capacity

  • Notable Decliners:

    • -18% 8035.JP (Tokyo Electron): reports Q1 earnings; guidance cut widely disappoints

    • -8.8% 6501.JP (Hitachi): reports Q1 earnings with revenue below FactSet estimates

    • -7.3% 051900.KS (LG H&H): reports Q2 operating profit KRW54.80B vs StreetAccount KRW136.80B; Beauty operating profit (KRW16B) vs SA KRW54.39B

    • -5.5% 006400.KS (Samsung SDI): reports Q2 earnings with revenue and operating profit below StreetAccount estimates

• Data:

  • Economic:

    • China July

      • S&P Global manufacturing PMI 49.5 vs consensus 50.2 and 50.4 in prior month

    • Japan

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

        • Job offers to applicants ratio 1.22 vs consensus 1.25 vs 1.24 in prior month

      • July final manufacturing PMI 48.9 vs flash 48.8 and 50.1in prior month

    • Australia Q2

      • PPI +0.7% q/q vs +0.9% in Q1

        • PPI 3.4% y/y vs +3.7% in Q1

    • South Korea July

      • Trade balance $6.61B vs FactSet consensus $4.7B and $9.1B in prior month

        • Exports +5.9% y/y vs FactSet consensus +4.4% and +4.3% in prior month

        • Imports +0.7% y/y vs FactSet consensus +0.8% and +3.3% in prior month

  • Markets:

    • Nikkei: (270.22) or (0.66%) to 40799.60

    • Hang Seng: (265.52) or (1.07%) to 24507.81

    • Shanghai Composite: (13.26) or (0.37%) to 3559.95

    • Shenzhen Composite: 0.38 or +0.02% to 2175.49

    • ASX200: (80.80) or (0.92%) to 8662.00

    • KOSPI: (126.03) or (3.88%) to 3119.41

  • Currencies:

    • $-¥: (0.22) or (0.15%) to 150.5480

    • $-KRW: +11.60 or +0.83% to 1404.0700

    • A$-$: +0.00 or +0.05% to 0.6429

    • $-INR: (0.05) or (0.06%) to 87.4408

    • $-CNY: +0.01 or +0.13% to 7.2100