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StreetAccount Summary - Asian Market Recap: Nikkei +1.03%, Hang Seng +1.43%, Shanghai Composite +1.24% as of 04:10 ET

Sep 05 ,2025

• Synopsis:

  • Asian equities ended higher almost everywhere Friday. Biggest gains in Shenzhen, which saw an almost 4% gain with Shanghai and Hong Kong posting solid gains too. Japan and Taiwan boards also ended higher with a more modest gain for South Korea. India the sole benchmark in the red but is still set to end with a w/w advance. Other markets were mixed for the week with losses in mainland China, Japan and Australia, but most other major benchmarks posted a gain. US futures a few points higher, Europe opened with modest gains. US dollar lower; yen, AUD and NZD all strengthening to pare yesterday's gains. Treasury yields mixed, JGB yields lower. Crude oil futures down, precious metals flat; iron ore and copper higher.

  • Asia equities following through from Wall Street's closing rally to end higher almost everywhere. Mainland China technology stocks bounced back noticeably following declines earlier in the week with Cambricon Tech and SMIC among the notable gainers, albeit still with w/w losses. Despite Friday's rally, debate over valuations and regulator responses ongoing, especially given poor corporate earnings growth and weak economic fundamentals. Wall Street's equity rally Thursday accompanied by a steadier Treasury market just as Fed Fund Futures price in a 99% chance of a Fed cut this month following tepid job numbers. Asia investors betting a dovish Fed will give regional central banks more room for their own rate cuts, giving equity markets here a boost over the day.

  • In regional developments, the White House signed off on implementing a 15% tariff rate on Japanese imports, including autos which gave Japan auto stocks a bump but weighed on South Korea autos. Japan nominal wage growth rose to a seven-month high but household spending was lower than expected amid lingering inflation effects. Meanwhile, PM Ishiba vowed to stay on as PM following the tariff deal and amid reports he suggested dissolving the Diet and calling snap general election. Thailand's parliamentary debate on its next prime minister is ongoing Friday afternoon, with Anutin Charnvirakul the likely winner.

  • POSCO (011200.KS) is planning to buy a controlling stake in cargo carrier HMM (011200.KS), according to KED, from Korea Development Bank. US immigration authorities detained up to 450 individuals working at a Georgia-based Hyundai Motor (005380.KS) factory. Shenghe Resources (600392.CH) said it will raise its takeover offer for Peak Rare Earths (PEK.AU) by 23% citing higher commodity prices since its original offer.

• Digest:

  • Trump signs executive order on Japan tariff deal:

    • Bloomberg reported President Trump signed an executive order Thursday implementing his trade agreement with Japan, under which the US will impose a maximum 15% tariff on most of its products, including automobiles and parts. Directive prevents the stacking of new duties on top of existing levies. The 15% level applies retroactively to most products shipped starting 7-Aug. while relief for aerospace and automobile imports will become effective within seven days from Thursday. Nikkei noted the order stipulates Japan will raise US rice imports by 75% under its tariff-free minimum access quota. Current US imports at 350K tons and a 75% increase would take the total to about 600K. President order also included Japan purchases of $8B worth of American agricultural goods including soybeans, corn and bioethanol. Japan lead negotiator Akazawa now in Washington to meet Commerce Secretary Lutnick and other officials to discuss the auto tariff and Japan's $550B investment in the US. Follows Akazawa's last-minute cancelation of the visit last week that was reportedly prompted by a disagreement over US stipulations on Japan's rice purchases and tariffs.

  • Japan PM Ishiba prepared to dissolve lower house to counter early leadership vote:

    • Yomiuri discussed the political landscape as the LDP prepares to hold an early party presidential election to unseat Prime Minister Ishiba who is running out options. Ishiba reportedly told several party members of his intention to dissolve the lower house if confronted with a leadership vote. However, the article noted several hurdles for this scenario. Dissolution typically requires the Diet (currently in recess) to be in session so that the lower house speaker can make a formal declaration to a plenary session. Still, out-of-session announcement said to be theoretically possible, citing the Nakasone administration's double dissolution in 1986. Second, such a motion requires unanimous support from cabinet and many members are expected to oppose given the power vacuum it would cause. Former PM Junichiro Koizumi dismissed one dissenter in order to push through a dissolution in 2005. Coalition partner Komeito said to be against a snap general election. Immediate attention currently on gauging appetite an early party leadership election. With internal polling under way and requiring a simple majority, NHK reported 11 out of 47 prefectural chapters are in favor or moving toward support as of Thursday, while three will not call for an election. Results to be announced Monday.

  • Japan wage growth notably beats, household spending still constrained by inflation:

    • Nominal average wages rose 4.1% y/y in July, above consensus 3.0%. Follows revised 3.1% in the prior month (previously 2.5%) to mark the strongest growth since December. Main driver was heavily weighted special payments, reflecting growth in summer bonuses. However, other components also picked up, seemingly led by regular employee compensation. Traditional real wage series (deflated by CPI ex-imputed rent) increased 0.5% reversing a revised 0.8% decline in June for the first positive reading since December. Recently introduced alternative gauge using headline CPI expanded a stronger 1.0%. Furthermore, total hours worked logged the first rise in a year reflecting stabilization in scheduled shifts. Household spending climbed 1.4% y/y in July, below consensus 2.3%, following 1.3% in the prior month. Nominal spending grew 5.1%. Deflators dragged food and apparel spending into negative territory. Similarly, nominal income expanded 1.0% while contracting 2.5% in real terms. Growth rates have also been suppressed by unfavorable base effects, particularly in semi-annual bonuses which turned negative amid a jump in Jul-24. BOJ sees traction in compensation growth as key to sustain resilience in private consumption (despite lack of real growth) during an expected soft cyclical patch as global demand slows.

  • Weak earnings growth, sluggish economy sow doubts about durability of China rally:

    • Strong China stockmarket rally over August inviting doubts about sustainability with skeptics highlighting influence of liquidity amid still-weak economic and corporate fundamentals. Analyst data showed mainland company profit growth of 1.6% y/y in June quarter slowed from 3.5% pace in prior quarter, weighed down largely by non-financial firms where earnings dropped 1.6% amid deflation pressures, property market weakness and intense price competition in sectors like EVs, solar equipment and food delivery (Bloomberg). Liquidity-driven flows thought to have been magnified by rotation out of lower yielding bonds while record turnover and margin trades played further into concerns about emergence of speculative excess. Strength of the rally reportedly caught attention of regulators with Bloomberg sources noting efforts being considered to cool markets. Some thought early intervention by authorities will auger for more durable rally with options including lifting minimum margin deposit ratio for brokers, removal of short selling curbs or 'National Team' involvement (Bloomberg).China bulls also point to market support from undemanding valuations, expected pickup in A-share earnings growth, tailwinds from policy support follow-through and success of anti-involution campaign.

  • As US tightens China tech curbs, China's big tech firms remain keen on Nvida:

    • US-China tech tensions have come back into focus after White House revoked waiver for TSMC (2330.TT), Samsung Electronics (005930.KS) and SK Hynix (000660.KS) that allowed them to send chipmaking equipment to China without requiring license. In latest development, Anthropic executive told FT company will stop selling AI services to firms majority owned by Chinese entities in bid to prevent technology being used in Chinese military and intelligence applications. Move would potentially apply to companies such as ByteDance, Tencent (700.HK) and Alibaba (9988.HK). While Beijing has been mounting campaign to encourage adoption of homegrown chips, Reuters sources highlighted how big Chinese tech firms still dependent on Nvidia (NVDA) technology. While potential Nvidia B30A chip based on Blackwell architecture may be double cost of H20s, China firms believe it will be worth it for a chip promising to be 6x time more powerful than H20. Lack of domestic supply and comparatively weaker performance of Huawei and Cambricon (688256.CH) chips also underlining Nvidia's appeal to China tech firms.

  • Notable Gainers:

    • +12.5% 1772.HK (Ganfeng Lithium Group): government aims for high-quality development in 2025-2026 action plan to stabilise growth

    • +6.1% 001040.KS (CJ Corp): company reportedly enters merger process with CJ Olive Young

    • +5.6% 600392.CH (Shenghe Resources Holding): adjusts acquisition price for Peak rare earths from A$158M to A$195M

    • +4.1% 6503.JP (Mitsubishi Electric): reportedly to increase total shareholder return to 70% by FY27 vs 41.3% in FY24

    • +2.0% 011200.KS (HMM): POSCO reportedly planning to buy controlling stake of HMM; POSCO responds to media report; states no decision has been made;

    • +2.0% 7203.JP (Toyota Motor): Trump signs order to lower tariffs on Japanese auto to 15%

  • Notable Decliners:

    • -9.7% 9090.JP (AZ-COM Maruwa Holdings): to issue ¥22B Euro-yen convertible bonds with stock acquisition rights due 2030

    • -5.4% 042660.KS (Hanwha Ocean): holder Hanwha Impact Partners divests 13.1M shares at KRW107,100/share via off-market trade

    • -3.7% 003380.KS (Harim Holdings): to issue KRW143.21B exchangeable bonds due 12-Sep-2030

    • -2.2% S08.SP (Singapore Post): Alibaba reportedly sells SG$65M ($50M) Singapore Post shares at SG$0.428/share

    • -1.9% 2303.TT (United Microelectronics): reports August revenue NT$19.16B, (7.2%) y/y

• Data:

  • Economic:

    • Japan July

      • Household spending +1.4% y/y vs consensus +2.3% and +1.3% in prior month

      • Spending +1.7% m/m vs consensus +1.3% and (5.2%) in prior month

      • Average nominal wages +4.1% y/y vs consensus +3.0% and revised +3.1% in prior month

        • Real wages +0.5% y/y vs revised (0.8%) in prior month

    • Singapore

      • July retail sales nominal y/y +4.8% versus +2.4% in prior month

  • Markets:

    • Nikkei: 438.48 or +1.03% to 43018.75

    • Hang Seng: 359.47 or +1.43% to 25417.98

    • Shanghai Composite: 46.64 or +1.24% to 3812.51

    • Shenzhen Composite: 74.37 or +3.19% to 2405.82

    • ASX200: 44.70 or +0.51% to 8871.20

    • KOSPI: 4.29 or +0.13% to 3205.12

    • SENSEX: (234.66) or (0.29%) to 80483.34

  • Currencies:

    • $-¥: (0.31) or (0.21%) to 148.1770

    • $-KRW: (3.95) or (0.28%) to 1389.6500

    • A$-$: +0.00 or +0.43% to 0.6544

    • $-INR: +0.10 or +0.12% to 88.2953

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