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StreetAccount Summary - Asian Market Recap: Nikkei +1.53%, Hang Seng (1.12%), Shanghai Composite (1.25%) as of 04:10 ET

Sep 04 ,2025

• Synopsis:

  • Asia equities traded mostly higher Thursday away from China's markets that fell again on talk of regulator curbs on trading. Shenzhen worst affected as semiconductor stocks sold down sharply, Hang Seng stabilized after morning losses. Gains elsewhere including outperformance in Japan, Australia and India. South Korea and Taiwan also closed a few points higher, Southeast Asia mostly supported. US futures with no clear direction, Europe pared early gains. US dollar unchanged, AUD and NZD weaker but little forex movement of note elsewhere. Treasury yields higher across tenors, JGB yields lower with 30Y yield slipping post auction this morning. Crude oil prices lower, gold and silver down sharply, base metals mixed.

  • Asia equities continued to drift on lack of meaningful catalysts Thursday except this time the path of least resistance was to the upside following overnight gains on Wall Street. China benchmarks down for a third consecutive day on reports domestic regulators were weighing measures to cool equity markets and speculative trading. But elsewhere the overnight momentum continued with a broad rally led by Japan's Nikkei. Japan's move higher came amid a modest dip in long-dated JGB yields following a soft, but firmer-than-feared, 30Y bond auction this morning. Despite the reprieve, overarching theme of investor concern over higher issuance persists amid domestic political pressure for stimulus.

  • Elsewhere, RBA Governor Bullock said Wednesday consumption growth was stronger than RBA had anticipated and if the trend continued there may not be that many rate cuts left. Meanwhile, Australia household spending growth rose to its highest since late 2023 in July while exports rose to 21-month highs in the same month. Malaysia's central bank held its base rate steady, as widely expected. Thailand's ruling party had its petition for the dissolution of parliament returned, paving the way for a PM vote Friday. India's proposed GST cuts will take effect earlier than expected on 22-Sep.

  • BYD (1211.HK) slashed its annual sales target by 16% as demand intense competition in China's home market dampens demand. Zijin Mining (2899.HK) is aiming to raise at least $3B in the Hong Kong spin off and listing of its gold mining business. Nippon Steel (5401.JP) settles dispute with US steelworkers' union, Cleveland-Cliffs over US Steel deal (Reuters). Nidec (6594.JP) said it had found documents that suggested several units had engaged in improper accounting methods; shares sharply lower.

• Digest:

  • China mulls cooling measures to rein in stock speculation:

    • Bloomberg citing people with knowledge reported China's financial regulators are considering curbs on stock speculation as bubble risks grow from a $1.2T rally since start of August that defies lingering economic weakness. Measures proposed to top policymakers include removal of some short-selling curbs and some other options to restrain speculative trading. Regulators have already asked brokers to refrain from aggressively promoting round-the-clock services to help open new stock accounts and urged social media platforms not to overly publicize content such as "bull market", "margin transactions hitting new high" and "shifting bank deposits into stocks". Noted recent bull run in China market has drawn comparison with leverage-driven boom and bust in 2015 that left many retail traders with heavy losses. Authorities are seeking to cultivate steadier gains or a "slow bull" to help revive economy and consumer sentiment. Stability in capital markets was also crucial to authorities as country staged military parade this week to mark end of WWII.

  • Lack of major surprises in JGB 30y auction offers some reprieve:

    • JGB 30y auction was a JPY700B reopen of #87 carrying a 2.8% coupon. Low price was marginally below consensus with a slightly longer tail (Nikkei). Takeaways leaned on the disappointing side, though outcome was not as bad as feared by some (foreign investors were apparently notably bearish). Still, bonds sold at record high yields, consistent with current benchmark, reflecting steady build-up of political uncertainties compounding concerns about deterioration in fiscal discipline. Local press now calling this dynamic the 'fiscal premium.' Meanwhile, lack of secular superlong buyers have given rise to a supply-demand imbalance, prompting MOF to consider further issuance cutbacks. MOF confirmed yesterday that FY26 general budget requests totaled a third straight record high JPY122.445T with increases in almost all categories. Debt servicing costs alone stood out as the biggest contributor +JPY4.169T accounting for more than half the total expansion +JPY7.248T over FY25 after the assumed average interest rate was hiked substantially. Social security and defense have been the other areas receiving most of the attention. Going forward, MOF will tweak the amounts before submitting a budget bill proposal, but markets also concerned that persistent calls for stimulus from opposition parties will force the minority government to capitulate to pass legislation.

  • RBA Governor Bullock says strengthening consumption may limit scope for rate cuts:

    • In follow-up remarks to a speech on Wednesday, RBA Governor Bullock touched on better-than-expected Australian Q2 GDP print (Bloomberg). In remarks that leaned somewhat hawkish, Bullock said consumption growth a bit stronger than RBA thought and that if trend continues there may not be that many rate cuts left in current easing cycle. Latest figures showed household spending growth rose to 5.1% y/y in July from 4.8% pace in June, highest since late 2023. Near-term rate expectations little changed with markets still predicting RBA on hold in September before cutting rates in November. Final rate cut expected by May-2026 taking terminal rate to 3.10%. Sell-side takeaways from GDP data fairly uniform in highlighting contribution from household consumption growth. Rate cuts seen as catalyst for continued recovery in private demand, supporting for views only more rate cut left. Dovish views eyeing two more rate cuts downplayed GDP beat, anticipating temporary effects that drove consumption to dissipate while fading fiscal impulse, tepid investment and weak productivity to limit overall growth.

  • Malaysia's central bank keeps base rate on hold:

    • Bank Negara Malaysia (BNM) held its key interest steady at 2.75%, as widely expected despite benign inflation, growing risk to economic growth from global trade disruption. Several economists had forecast a 25 bps cut to follow from July's unexpected quarter point trim made in wake of 19% US tariff deal. However, at time, economists noted move likely one-off rather than start of easing cycle. Bank said latest data indicates continued global growth supported by consumption, front-loading activities; added risks remain skewed to downside on tariffs, geopolitics offset by pro-growth policies, future US trade deals. Said Malaysia economy on track for 4.0-4.8% y/y growth this year, FY26 to be supported by resilient domestic demand, wage growth. Expects inflation to remain moderate as lower commodity prices will press on domestic prices. Economists polled by Reuters showed little appetite for rate cuts reaching into 2027, most see current 2.75% as terminal rate.

  • Tariff revenue was containing yields before sentiment turned following court ruling:

    • US federal appeals court decision upholding Court of International Trade decision in May that deemed reciprocal tariffs illegal is focusing more attention on implications for bond markets, particularly risk of upward pressure on longer-term yields from a decline in projected revenue if decision is upheld by SCOTUS and administration is forced to return duties already collected (FT). While President Trump voiced confidence of a SCOTUS win he also acknowledged Wednesday that an unfavorable decision could prove costly (Reuters). With CBO estimating tariff revenue reducing cumulative deficits by $4T through 2035 (link), fixed income traders agued projected tariff revenue was helping to contain bond yields by offsetting cost of Trump's tax cut legislation. This week's backup in yields was attributed in part to concerns reduced tariff revenue from an unfavorable court ruling will worsen Treasury supply glut. S&P's decision to reaffirm US credit rating also rested in part on tariff revenue offsetting budget deficit. Trump expected to lean on separate authority in event of an unfavorable court ruling, though markets will have to wade through fresh uncertainty until an alternative tariff regime is established.

  • Notable Gainers:

    • +4.0% 2408.TT (Nanya Technology): reports August revenue NT$6.76B, +141.3% y/y

    • +1.2% 7250.JP (Pacific Industrial): Effissimo Capital discloses 5.5% stake

    • +0.9% 8698.JP (Monex Group): acquires additional 20.6% stake in 3iQ Digital Holdings for C$45.8M (¥4.92B)

  • Notable Decliners:

    • -22.4% 6594.JP (Nidec): finds documents suggesting unit Nidec Techno, company and other units could have engaged in improper accounting; establishes third-party committee to investigate

    • -12.0% 9688.HK (ZAI Lab): provides update on Amgen's bemarituzumab phase 3 FORTITUDE-101 study

    • -1.6% 1776.HK (GF Securities): China reportedly considering cooling measures for stock market to promote steady gains

• Data:

  • Economic:

    • Australia July

      • Household spending +0.5% m/m vs consensus +0.5% and +0.5% in June

        • Household spending +5.1% y/y vs consensus +5.0% and +4.8% in June

      • Trade balance A$7.31B vs consensus A$4.90B and A$5.37B in June

        • Exports +3.3% y/y vs +6.0% in June

        • Imports (1.3%) y/y vs (3.1%) in June

  • Markets:

    • Nikkei: 641.38 or +1.53% to 42580.27

    • Hang Seng: (284.92) or (1.12%) to 25058.51

    • Shanghai Composite: (47.68) or (1.25%) to 3765.88

    • Shenzhen Composite: (48.85) or (2.05%) to 2331.45

    • ASX200: 87.70 or +1.00% to 8826.50

    • KOSPI: 16.41 or +0.52% to 3200.83

    • SENSEX: 409.72 or +0.51% to 80977.43

  • Currencies:

    • $-¥: +0.18 or +0.12% to 148.2960

    • $-KRW: +1.98 or +0.14% to 1391.5400

    • A$-$: (0.00) or (0.29%) to 0.6525

    • $-INR: +0.06 or +0.07% to 88.1311

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