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StreetAccount Summary - Asian Market Recap: Nikkei +0.29%, Hang Seng (0.47%), Shanghai Composite (0.45%) as of 04:10 ET

Sep 02 ,2025

• Synopsis:

  • Asia equities ended mixed Tuesday. Greater China markets all traded lower on likely profit taking after a stellar August. Australia and Taiwan the other boards to show losses. Japan's main boards gained a few points, South Korea, India, Singapore and Southeast Asia including Indonesia and Thailand all modestly higher. US futures lower, European markets opened firmly down. US dollar sharply higher in afternoon trade; yen, AUD and NZD all weakened notably. Treasury yields higher across tenors with yield curve steepening further, JGBs mixed but long-dated yields higher. WTI contracts sharply higher, more modest gains for Brent. Gold surging to fresh record highs, silver at 14-year high on Fed rate cut expectations. Industrial metals mixed with further losses for iron ore.

  • Asia markets drifted Tuesday with the US closed overnight and few regional catalysts to digest thus far this week. Late in afternoon trade, long-dated sovereign bond yields increased noticeably globally, and the dollar surged against most developed market currencies; US futures also dipped just as European markets opened lower however the moves came too late to impact most of Asia's markets. Some evidence of profit taking in mainland China amid last week's talk of valuation frothiness while several Hang Seng-listed internet consumer names partly reversed yesterday's gains. Political developments in Indonesia and Thailand also not impacting local markets as much as expected as the JSX and SET largely recover recent losses. Thailand's parliament likely to meet tomorrow to begin process of choosing next prime minister.

  • Japan's 10Y JGB auction attracted firm interest to shrug off concerns over demand. India and China refreshed ties at the SCO meeting but while the public bonhomie took the headlines, analysts noted still-unresolved divisions between New Delhi and Beijing. Russia's Gazprom signed a deal to build a second gas pipeline from Russia to China. South Korea CPI inflation slowed by more than expected to its lowest since Nov-24 but the BOK warned over a potential surge in September.

  • DENSO (6902.JP) has agreed to transfer its oxygen and air-fuel ratio sensor business to Niterra (5334.JP) for an undisclosed amount. Japan Post Bank (7182.JP) said it will launch a blockchain-based digital yen in 2026. BYD (1211.HK) posted a fall in quarterly sales as it loses market share to other China-based producers. Kasikornbank (KBANK.TB) dropped a key profit goal for the year amid a stuttering Thailand economy. State Bank of India (500112.IN) said it will raise at least $500M and perhaps up to $1B in a dollar-denominated bonds just days after the country's sovereign credit rating was upgraded. DBS (D05.SP) has yet to receive regulatory approval to commence talks over acquiring a stake in Alliance Bank Malaysia (2488.MK).

• Digest:

  • JGB market concerns allayed (for now) by 10y auction, dovish Himino takeaways:

    • MOF 10y JGB auction (JPY2.6T, reopen #379, 1.5% coupon) came in firmer than expected on lowest price and bid-to-cover was highest since Oct-23 (Nikkei). While tail also shortened, average accepted yield (1.612%) and highest yield (1.619%) were the highest since Jul-08. Some thoughts 1.6% level now considered the new floor amid ongoing concerns about fiscal policy risk that will continue to pose an overhang for the 30y auction on Thursday. That said, bonds strengthened through 15y zone with 10y yield down 3 bp since the auction results. Better than expected headline result coupled with dovish takeaways from BOJ Deputy Governor Himino's speech that was interpreted as cautious on the next rate hike (Bloomberg). Preceding bond market commentaries indicated participants had been bracing for a hawkish tilt. This encouraged position lightening that contributed to yesterday's weakness in benchmark 10y, which has been recouped today. While market sentiment notably departed from longstanding sensitivity to hawkish signals, fiscal debt risk and political uncertainties remain large. Press continued to indicate FY26 general budget requests set for a third straight record high (Reuters). Attention today on LDP developments with its election review that may pressure Prime Minister Ishiba and executive committee to step down.

  • BOJ's Himino suggests uncertainty should not be overplayed:

    • In a speech, BOJ Deputy Governor Himino reaffirmed support for policy normalization in accordance with improvement in economic activity and prices. Noted real rates remain "significantly low" as inflation stays strong. Also drew insights from New York Fed's Williams at a BOJ event in May prescribing the appropriate response to uncertainty -- essentially that it should not dictate future course of action. Himino added that uncertainty will never disappear from the landscape and policymakers must continually assess the risk balance and respond accordingly to ensure damage is reasonably well contained. Elaboration of tariff impacts noted Japan wage hikes and summer bonuses have not been impacted significantly while private consumption remains resilient, leading to the conclusion that adverse effects will take time. Description of the inflation outlook was upbeat -- while underlying inflation remains below 2%, it is gradually approaching the threshold. Anticipates positive wage-price dynamics to remain in place, eventually pushing underlying inflation to the target. Additional discussion of JGB purchase reductions were broadly in support of a wind-down in the BOJ's balance sheet to reduce risks and allow market formation of long-term rates while reindorsing predictability and retention of enough flexibility.

  • South Korea CPI inflation softer than expected on temporary telecom discount:

    • Headline CPI rose 1.7% y/y in August, notably below FactSet consensus 2.0%. Follows 2.1% in the previous month, marking the lowest since Nov-24. Core inflation also moderated to 1.3% from 2.0%. Standout development was a 13.3% drop in communication. Mobile phone fee subcomponent dropped 21% y/y, primarily reflecting a 50% discount provided by market leader SK Telecom in atonement for its data breach in April (Yonhap). However, the discount only applies to the August billing period, pointing to a September rebound. Communications were the only drag on the headline in both sequential and year-ago terms. Statistics Korea official noted that if mobile phone fees were steady on the month, headline CPI inflation would have reached 2.3% for the hottest reading since Jul-24. Still, timing fits with fiscal policy easing and cautious macro rhetoric in response to US tariffs (Bloomberg). After BOK left rates steady last month as macro risks were offset by real estate prices/household debt, MPC retained their rate cut bias and some economists expect easing cycle to resume at the next policy meeting on 23-Oct.

  • Thailand's 'kingmaker' party delays saying which PM candidate it will support:

    • Thailand's largest parliamentary party has delayed declaring whom it will support to become next PM. People's Party (PP) won 143 seats in 2023's election when called 'Move Forward' but will not join any government coalition, nor can nominate PM from within own ranks. Said did not trust either Pheu Thai or Bhumjaithai parties that will nominate PM candidates, has asked both for referendum on constitutional amendment, dissolution of parliament within four months (BangkokPost). Parliament to start special session Wednesday, could vote for new PM later this week if parties ready to nominate candidate however has no time limit on forming new government. Analysts say this could lead to protracted negotiations (Reuters), likely to prolong political instability, Thai asset volatility. In turn, could mean further overseas investor outflow this week, more baht instability (TheNation, BangkokPost) although economists also said snap election could also bring forward BoT rate cut (Bloomberg).

  • India offered to cut US tariffs to zero, says Trump, as Modi refreshes China relations:

    • President Trump said India offered to cut its US tariff rate to zero following imposition of 50% rate on India imports last week but warned 'it is getting late' (BusinessStandard). Previously known New Delhi had offered to cut tariff rate to zero on auto components, pharmaceuticals et al but had held firm on agriculture, dairy market access (Bloomberg). Trump's comments come as PM Modi renewed friendly ties with China, refused to back down over India's purchases of Russian oil which Trump used as rationale for 50% levy (Mint). However, economists warned refreshed friendship between India and China not enough to completely offset impact of 50% tariff. Mint cited analysts that said China bonhomie could be 'short-term' tactical move, as deep divisions remain over unresolved border issues, Belt and Road strategy, while widening trade deficit with China weakens New Delhi's bargaining position.

  • Notable Gainers:

    • +5.2% 5334.JP (Niterra Co.): DENSO agrees to transfer its oxygen and air-fuel ratio sensor business to Niterra

    • +2.9% 2587.JP (Suntory Beverage & Food): Suntory Holdings to hold emergency press conference at 15:00 JT today

    • +1.7% 8253.JP (Credit Saison): reports July total transaction volume (including non-card business) +4.5% y/y

    • +0.8% 601633.CH (Great Wall Motor): reports August sales 115,558 units, +22.3% y/y

    • +0.8% 600276.CH (Jiangsu Hengrui Pharmaceuticals): obtains NMPA marketing approval for HRS9531 injection for weight management in adults; obtains NMPA conditional approval for class 1 innovative drug, Zemetuxostat tablets

  • Notable Decliners:

    • -7.6% 2096.HK (Simcere Pharmaceutical Group): enters 121M-shares placing and TOP-UP subscription agreement at HK$12.95/share

    • -4.6% 100090.KS (SK Oceanplant): SK Ecoplant selects The Ocean Consortium as a preferred negotiator for the sale of SK Oceanplant stake

    • -3.7% 032640.KS (LG Uplus): South Korean government agencies reportedly conducting on-site inspections into potential hacking incident

• Data:

  • Economic:

    • Australia

      • Q2 current account balance ($13.7B) vs consensus ($16.0B) and revised (A$14.1B) in Q1

        • Net exports to add 0.1 ppt to Q2 GDP vs (0.1) ppt subtraction from Q1 GDP

        • Public demand to make zero contribution to Q2 GDP vs (0.1) ppt subtraction from Q1 GDP

    South Korea

    • August CPI +1.7% y/y vs FactSet consensus +2.0% and +2.1% in prior month

      • CPI ex-food & energy +1.3% y/y vs +2.0% in prior month

• Markets:

  • Nikkei: 121.70 or +0.29% to 42310.49

  • Hang Seng: (120.87) or (0.47%) to 25496.55

  • Shanghai Composite: (17.40) or (0.45%) to 3858.13

  • Shenzhen Composite: (50.37) or (2.04%) to 2414.46

  • ASX200: (27.10) or (0.30%) to 8900.60

  • KOSPI: 29.42 or +0.94% to 3172.35

  • SENSEX: 180.16 or +0.22% to 80544.66

• Currencies:

  • $-¥: +1.65 or +1.12% to 148.7000

  • $-KRW: +4.59 or +0.33% to 1393.5600

  • A$-$: (0.00) or (0.57%) to 0.6503

  • $-INR: (0.06) or (0.07%) to 88.0978

  • $-CNY: (0.00) or (0.01%) to 7.1298