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StreetAccount Summary - Asian Market Recap: Nikkei +0.01%, Taiex +1.68%, ASX (0.27%) as of 04:10 ET

Oct 07 ,2025

• Synopsis:

  • Asia equities traded mostly higher Tuesday in a quiet day's trading. Taiwan led as its tech stocks caught up with Monday's rally; India and Singapore also higher. Japan's main boards pared early gains and finished flat. Southeast Asia mostly higher, Australia lower. Market holidays in South Korea and Greater China. US futures lower, Europe down in the first hour of trade. US dollar stronger, yen weakened further, AUD and NZD accelerating losses. Treasury and JGB yields mixed. Crude oil contracts slightly higher, gold lower. Base metals mixed, cryptocurrencies off recent highs.

  • Asia equities followed the path of least resistance Tuesday and closed mostly higher in thin trading. Japan's Nikkei and Topix boards opened higher but their rally lost steam with both back at the flatline by the close. But the yen weakened further and maintained its level around ¥150 per dollar as traders push out bets over the BOJ's next rate hike; 30Y JGB yields flat on the day following firmer-than-feared auction this morning as other tenors ticked higher. Analyst response to Senae Takaichi's election as LDP leader generally backed up yesterday's market action: supportive for equities, particularly those related to nuclear power and defense; supportive for JGB yields given fiscal-stimulus views; dovish on rates which in turn could weaken the yen. Some question marks emerged over her potential longevity as PM given uneasiness in LDP's ruling coalition over some of her policies with some analysts suggesting a general election in February is a possibility.

  • Few other catalysts today to alter the positive narrative in equity markets. Japan household spending came in higher-than-expected, real household income growth turned positive for first time in three months. Australian consumer sentiment fell to a six-month low while labor market indicators also came in soft as job advertisements logged their biggest monthly decline since early 2024. China's forex reserves rose to a ten-year high in September, partly on the weaker US dollar; Indonesia's forex reserves fell to a more than year-long low on debt payments and BI's rupiah support. Philippines CPI accelerated for a second consecutive month just as the country's central bank meets this week to decide on interest rates with most economists expecting no change.

  • Elliott Investment management has reportedly approached several Japan companies about buying shares they hold in Sumitomo Realty & Development (8830.JP). Asahi Group (2502.JP) restarted beer production at all six production facilities following a cyberattack. India software services group LTIMindtree (540005.IN) said it had won its largest ever contract worth $580M despite US tariff and immigration risks. The IPO of LG Electronics' (065570.KS) India unit has drawn interest from Norway and Singapore wealth funds as anchor investors; Tata Capital began to take orders for its INR155B listing in India's largest IPO this year.

• Digest:

  • Japan's 'Sanaenomics' seen broadly positive for equities:

    • Analyst takeaways from Takaichi's victory in the LDP leadership race were broadly positive on the equity market outlook. Tech, defense, energy including nuclear power, agriculture mentioned as bright spots, while bank prospects looking relatively dimmer. Policy direction seen basically favoring fiscal expansion through stimulus. Takaichi indicated a willingness to resort to deficit-covering JGB issuance, while cognizant of sustainability. Takaichi's mention of net debt-to-GDP ratio as a key barometer prompted some thoughts this could free up more room for stimulus given policy is currently benchmarked to gross debt-to-GDP. Stance on BOJ policy has toned down since last year's contest though still seen as cautious on rate hikes, underlined by a recent remark that cost-push inflation is inadequate. That said, JPMorgan suggested Takaichi won't stand in the way of rate hikes to curb yen weakness that will exacerbate inflation pressures given cost of living is a top priority. However, analysts also raised several qualifying factors. Beyond the initial euphoric phase, much of the outlook depends on size and scope of stimulus, in turn hinging on support from at least one of the larger opposition parties. MUFG even constructed a scenario analysis that includes Komeito leaving the coalition amid potential chemistry issues under a more right-leaning LDP. Quant discussions were bullish yet focused on already elevated CTA Japan positions that raise questions as to where additional inflows will come from. Initial bullish wave also reflecting re-entry into depressed sectors rather than a better earnings outlook.

  • Japan LDP appoints key party roles, looks to allay Komeito reservations:

    • Nikkei reported LDP appointed key party positions under newly inducted president Takaichi. Affirming press leaks, executive committee dominated by Aso faction members. Taro Aso himself appointed Vice President, former Finance Minister Suzuki as Secretary-General and Haruko Arimura as General Council Chair. The one notable exception is former Nikai faction member Kobayashi as policy research chair, though his policy views are seen as close to those of Takaichi. Election strategy committee chair was given to Keiji Furuya, unaffiliated, though was a key member of Takaichi's election campaign team. At a joint press conference, Kobayashi vowed to expedite the formulation of cost-of-living relief measures. LDP also preparing the next cabinet line-up. Arrangements under way to include former secretary-general Motegi, while Koizumi and current Chief Cabinet Secretary Hayashi also expected to be appointed. Takaichi now due to hold talks with coalition partner Komeito, which has raised three areas of concern under a more conservative administration, requiring clarity of stance in politics/money, Yasukuni Shrine and immigration. Suzuki said he hopes to dispel concerns and further deepen their relationship. Nikkei separately reported some members of Komeito's parent organization Soka Gakkai are calling for an exit from the coalition over concerns about Takaichi's conservative stance in areas such as visits to Yasukuni Shrine.

  • Japan household spending beats, supported by income growth:

    • Household spending rose 2.3% y/y in August, above consensus 1.2%. Follows 1.4% in the previous month and marks the fourth straight increase in real terms. Growth led by auto purchases, overseas and domestic tourism packages, and school tuition, offering some encouraging signs from discretionary spending, which has outperformed essentials every month this year. Cost of living drag remains a constant; headline nominal spending grew a stronger 5.5% as the deflator transformed similar growth in food & beverages to a 1.2% real decline. Real household income logged 2.8% growth, turning positive for the first time in three months, though still contrasts starkly with stronger nominal income, which has been positive every month since the start of 2024. Lower purchasing power has induced higher propensity-to-consume since Nov-24, though broader narrative including from BOJ has observed recent softening as a function of growing cost-consciousness in consumer sentiment. BOJ real consumption activity index fell 0.1% m/m, extending a 0.8% decline in the prior month. Q3 trajectory now down 0.8% q/q after a 0.1% contraction in Q2. JCER consensus looks for 0.1% growth in Q3 GDP private consumption following 0.4% in Q2.

  • BOJ Sakura report was benign after Ueda said US tariff risks remain high:

    • Limited market impact Monday from the BOJ Sakura report. Regional economic assessment was unchanged in eight out of nine regions with one downgrade. Headline assessment unchanged; all areas reported some degree of improvement despite some areas of softness. Branch managers meeting summary acknowledged some concerns that wage growth could be hampered if corporate profits are hit substantially by US tariffs, though countered by upward pressures from domestic labor shortages and ongoing rise in cost of living. Most evidence reaffirmed continuation of corporate cost passthrough activity. Recall that this was seen as the next key risk event to determine the chances of an October rate hike, though content did not move the needle. BOJ Tankan survey was also benign in that respect. BOJ published a transcript of Governor Ueda's press conference in Osaka Friday after his speech where he noted the US-Japan tariff agreement has provided some clarity though overall uncertainties remain very high, particularly in terms of the outlook for the US economy and spillover effects on Japan. Ueda was also asked about recent hawkish signals from the two dissenters at the September MPM and subsequent Noguchi speech, which Ueda generally downplayed and reiterated the MPC was still evaluating risks. Following Takaichi's victory in the LDP leadership race, money markets slashed implied odds for an October hike Monday to around 30% from 60% Friday.

  • StreetAccount Event Preview: RBNZ 8-Oct policy meeting

    • RBNZ tentatively expected to cut OCR by 25 bp to 2.75% at its 8-Oct policy meeting, though no clear consensus among economists with calls split between 25 bp and 50 bp reduction. The 50 bp camp are basing their calls primarily on New Zealand Q2 GDP contraction that was much worse than RBNZ projected, giving central bank incentive to drop OCR to the ~2.50% trough it modelled in August. Unemployment rate is at five-year high, while housing market, manufacturing and services sector remain in a slump. Closely-watched NZIER Quarterly Survey of Business Opinion (QSBO) released today also showed deterioration in business confidence, hiring and investment intentions, raising market-implied odds of a 50 bp cut to 42% from 31% on Monday (Bloomberg). While Select Price Index (SPI) indicative of uptick in inflation over Q3, RBNZ seen looking through any temporary uplift in pricing pressures. Those sticking with predictions of a 25bp rate cut argue a smaller move accompanied by dovish messaging will give RBNZ time to assess upcoming data before easing by another 25 bp again in November when it next updates economic and OCR forecasts.

  • Notable Gainers:

    • +9.9% 2408.TT (Nanya Technology): reports September revenue NT$6.66B, +157.8% y/y

    • +9.4% 3186.JP (Nextage): reports Q3 net income attributable ¥3.65B, +137% vs year-ago ¥1.54B

    • +5.5% 3008.TT (LARGAN Precision): reports September revenue NT$6.24B, +4.5% m/m

    • +4.8% 3711.TT (ASE Technology Holding): to invest NT$17.6B in new factory K18B in Kaohsiung

    • +4.4% 4888.JP (Stella Pharma): has reportedly collaborated with University of Tokyo on next-generation radiation therapy in targeting cancer

    • +1.7% 8830.JP (Sumitomo Realty & Development): Elliott reportedly looking to acquire shares in Sumitomo Realty & Development from other Japanese companies with cross-shareholdings

  • Notable Decliners:

    • -7.1% 262A.JP (Intermestic): September same-store sales slowed to +4.9% y/y compared to +24.0% in July and +18.0% in August

    • -0.1% 6178.JP (Japan Post Holdings): acquires 19.9% stake in Logisteed from KKR

• Data:

  • Economic:

    • Japan August

      • Household spending +2.3% y/y vs consensus +1.2% and +1.4% in prior month

        • Spending +0.6% m/m vs +1.7% in prior month

    • Australia

      • October Westpac-MI consumer sentiment index 92.1 vs 95.4 in September

      • September ANZ-Indeed job advertisements (3.3%) m/m vs revised (0.3%) in August

  • Markets:

    • Nikkei: 6.12 or +0.01% to 47950.88

    • Hang Seng: Closed

    • Shanghai Composite: Closed

    • Shenzhen Composite: Closed

    • ASX200: (24.60) or (0.27%) to 8956.80

    • KOSPI: Closed

    • SENSEX: 430.42 or +0.53% to 82220.54

  • Currencies:

    • $-¥: +0.24 or +0.16% to 150.5850

    • $-KRW: +1.15 or +0.08% to 1411.8500

    • A$-$: (0.00) or (0.39%) to 0.6592

    • $-INR: +0.02 or +0.02% to 88.7413

    • $-CNY: (0.00) or (0.02%) to 7.1185