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StreetAccount Summary - Asian Market Recap: Nikkei (1.01%), Hang Seng (1.73%), Shanghai Composite (0.94%) as of 04:10 ET

Oct 10 ,2025

• Synopsis:

  • Asia equities traded mostly lower Friday to end a mixed week for the region's stocks. Among the benchmarks that fell were Japan's Nikkei and Topix indexes, China's Shenzhen and Hang Seng were notably lower while there were smaller losses for Singapore and Australia. South Korea's Kospi sharply higher as it marks-to-market following holidays and on positive news for SEC, India higher. Taiwan closed for a holiday. US futures higher, Europe opened slightly stronger. US dollar retreating slightly; NZD and AUD all slightly better, yen stronger on Japan political news. Treasury yields mixed, JGB yields largely lower. Crude oil futures down, gold regaining some of yesterday's losses, base metals under pressure. Cryptocurrencies quiet.

  • Japan's equities closed sharply down as its early-week rally faded with the equity markets closing before news broke that the minor party in the ruling coalition was to leave the government. The yen strengthened and JGB yields retreated on the reports, which unwound some early week dovish talk with a Senae Takaichi's PM bid thrown into doubt and general election now seemingly inevitable. Steep declines in Shenzhen and the Hang Seng Tech indexes amid increased talk of frothy valuations in China's technology sectors, mirroring those conversations on Wall Street. Sentiment not helped by the resurfacing of US-China trade tensions over rare earths and soybeans.

  • In regional developments, reverberations from this week's central bank moves continue with the New Zealand dollar, baht, rupiah and rupee among the currencies remaining under pressure with economists indicating the surprise moves reflect growing unease over medium-term economic growth. Japan wholesale inflation was steady in September against forecasts for a drop. RBA Governor Bullock gave hawkish remarks to a parliamentary committee, noting a tight labor market and risks to the upside for inflation. Malaysia unemployment was unchanged, retail sales growth eased while industrial output growth advanced nearly 5% to a year-long high just as its government unveiled its 2026 budget.

  • Unqlo helped Fast Retailing (9983.JP) to double-digit revenue and profit growth in Q4 despite US tariffs kicking in. Ganfeng Lithium Group (1772.HK) shares fell Friday following the announcement of fresh rare earth export restrictions. LG Electronics' (066570.KS) India IPO unit attracted $50B in bids to become the most subscribed India IPO in 20 years. Samsung Electronics' (005930.KS) HBM3E is to be adopted by Nvidia; shares sharply higher. Thailand's market regulator increased surveillance measures on Delta Electronics (DELTA.TB) following a recent stock surge on little substantive newsflow.

• Digest:

  • Japan Komeito plans to exit coalition with LDP over fundraising scrutiny:

    • NHK reported Komeito leader Saito met with LDP president Takaichi Friday to discuss their alliance. Komeito conveyed their view that LDP's response to ongoing scrutiny over political fundraising is inadequate, warranting an exit from the coalition. Article noted Saito had raised issues at a prior meeting on Tuesday, deferring a decision to reaffirm the partnership after Takaichi became LDP leader. Komeito officials discussed the situation internally last night and left the decision to leadership. Senior Komeito member Akaba was quoted last night as saying he would vote for Saito (rather than Takaichi) when parliament gathers to select the next prime minister. However, Saito himself clarified he would not support an opposition candidate (Nikkei). Also offered some reassurance that a breakup does not mean Komeito would oppose every legislation. Main issues raised previously were (1) money and politics, (2) historical acknowledgement including the treatment of Yasukuni Shrine and (3) immigration. They apparently made enough headway on the latter two items. Komeito proposed limitations on the number of political organizations able to receive donations as a step towards improved transparency. However, LDP was reluctant due to substantial implications for regional party members.

  • Japan focus on stimulus, coalition unity overshadows Takaichi comments on yen, rates:

    • Bloomberg cited comments by LDP leader Takaichi in a TV Tokyo program Thursday evening that she does not intend to induce excessive yen depreciation, while qualifying that there are pros and cons. Responded to a discussion about weak yen posing a source of inflation pressure. Declined to comment when asked if a USD/JPY level of above 150 was within the tolerance range. On monetary policy, clarified that she is not considering an immediate re-evaluation of the BOJ accord established during Shinzo Abe's second administration. Reaffirmed necessity for proper coordination. Takaichi added she should not comment on her personal stance on rate hikes. However, such rhetoric garnered no attention in the local press where coverage was dominated by concerns the ruling coalition could splinter amid some calls within Komeito to exit the alliance. Nikkei already began exploring implications of a breakup with analysis of the 2024 lower house election leading to the conclusion that LDP would likely lose 20% of single-seat districts held without Komeito's help. Takaichi said in an NHK news program that she would quickly assemble an economic package including cost-of-living relief measures if she is formally appointed prime minister by parliamentary vote (Nikkei). Komeito Secretary-General Kazuyoshi Akaba offered some reassurance the party would still support budget and tax reform bills even if they leave the coalition (Nikkei).

  • Chinese semiconductor stocks fall sharply on concerns about high valuations:

    • Sell-off in Chinese semiconductor stocks extends into second day in Hong Kong. SMIC (981.HK) and Hua Hong Semiconductors (1347.HK) dropped as much as 5% in early trading on Friday as worst performers in Hang Seng Tech Index after both shedding more than 6% on Thursday. Mainland stocks, which edged up on Thursday in some catch-up trade after Golden Week holiday, also retreating Friday. STAR 50 index falling 4% with Hygon Information Technology (688041.CH) nearly 7% lower and Cambricon Technologies (688256.CH) trading 4% down. Bloomberg discussed how some investors casting doubt on lofty valuations on China's chip stocks after impressive rally in past few months on Beijing's tech self-reliance push. FT sources said China has ramped up controls on chip imports as Beijing orders its big techs to stop ordering from US. Meanwhile Cambricon Technologies trading at multiples of 150X, nearly five times that of Nvidia's (NVDA) 33X as traders said such valuations do not leave much margin for error for Chinese names, considering there is already much talk of AI bubble in US. Further weighing on sentiments, ShanghaiSecuritiesNews reported collateral conversion rate for SMIC's onshore stock will be assigned 0% as its static P/E is above 300X, meaning investors cannot use the stock as collateral for new margin purchases or short selling.

  • Takaichi advisers remain vocally dovish on policy mix:

    • With LDP leader Takaichi apparently toning down her stance on fiscal and monetary policy in preparation for a formal appointment as prime minister, advisers have been advocating a dovish stance. In a Reuters interview, Etsuro Honda (known as one of the architects of Abenomics) said BOJ should be cautious about raising interest rates again as the economy is still fragile. Recognizing a growing sense that a rate hike may be approaching, noted timing (December or January) remains unclear but in the very least, "Takaichi appears to be taking a cautious stance." On FX, expressed his view that moderate yen depreciation is good for the economy when it is in a recovery phase, while expressing doubts USD/JPY will go beyond 155 given inflation expectations remain moderate. Generally echoed a previous interview with Bloomberg, where he said he doesn't see a problem with a 25 bp rate hike in December while adding that USD/JPY beyond 150 "seems a bit too much." In a separate Reuters interview, Credit Agricole chief Japan economist Takuji Aida (seemingly a second-tier adviser to Takaichi's circle) defended the benefits of yen depreciation to the economy while suggesting inflation pressure can be curbed by fiscal policy. Added a yen level of 140 or 150 makes domestic manufacturing viable, helps drive the capex cycle and provides a buffer against US tariffs. Projected BOJ likely to keep rates steady until 2027 except for one likely hike by January.

  • RBA Governor Bullock comfortable with inflation inside band, but labor market tight:

    • Appearing before Senate committee, RBA Governor Bullock repeated warning about an upside risk to Q3 CPI following hotter-than-expected July and August monthly inflation prints (Bloomberg). She expressed comfort with inflation inside 2-3% target band but also highlighted sticky nature of market services inflation that has been higher than RBA expected. This tied into her observation that labor market remains a little tight in some areas, and that while RBA still expects some loosening over remainder of 2025 it is unsure how conditions will evolve. Market-implied odds of a November rate cut fell below 50% following hawkish takeaways from RBA's October meeting that focused largely on its renewed concerns about persistent inflation and pickup in consumption growth that underpinned a more a bullish assessment of private demand. Bullock's emphasis on data dependency has elevated upcoming September labor market report (16-Oct) and Q3 CPI (29-Oct) in determining whether central bank holds or cuts in November.

  • Notable Gainers:

    • +6.6% 9983.JP (FAST RETAILING): reports FY net income attributable ¥433.01B vs FactSet ¥410.82B; guides FY26 net income attributable ¥435.00B vs FactSet ¥424.02B

    • +6.1% 005930.KS (Samsung Electronics): NVIDIA to adopt Samsung's HBM3E 12-high stack for GB300 system

    • +5.2% 600066.CH (Yutong Bus): reports September vehicle sales 4,756 units vs year-ago 3,788 units

    • +0.1% 2501.JP (Sapporo Holdings): reports September beer-type beverage sales +4% y/y

  • Notable Decliners:

    • -11.5% 1772.HK (Ganfeng Lithium Group): China exerts export controls on lithium related products and technologies

    • -3.5% 3382.JP (Seven & I Holdings): reports Q2 net income attributable ¥72.79B vs FactSet ¥70.78B; guides FY operating income ¥404.00B vs prior guidance ¥424.00B

    • -2.1% 8031.JP (Mitsui & Co.): Buffett's Berkshire Hathaway becomes the largest Mitsui shareholder

• Data:

  • Economic:

    • Japan

      • CGPI +2.7% y/y vs consensus +2.5% and revised +2.7% in prior month

      • Bank lending +3.8% y/y vs revised +3.5% in prior month

  • Markets:

    • Nikkei: (491.64) or (1.01%) to 48088.80

    • Hang Seng: (462.27) or (1.73%) to 26290.32

    • Shanghai Composite: (36.94) or (0.94%) to 3897.03

    • Shenzhen Composite: (44.25) or (1.74%) to 2505.71

    • ASX200: (11.50) or (0.13%) to 8958.30

    • KOSPI: 61.39 or +1.73% to 3610.60

    • SENSEX: 444.07 or +0.54% to 82616.17

  • Currencies:

    • $-¥: (0.30) or (0.20%) to 152.7760

    • $-KRW: (3.63) or (0.25%) to 1419.3300

    • A$-$: +0.00 or +0.01% to 0.6557

    • $-INR: (0.33) or (0.37%) to 88.5383

    • $-CNY: (0.00) or (0.07%) to 7.1235