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StreetAccount Summary - Asian Market Recap: Nikkei (1.11%), Hang Seng (0.29%), Shanghai Composite (0.01%) as of 03:10 ET

Jan 20 ,2026

• Synopsis:

  • Asia equities ended mostly lower Tuesday. Japan saw more sharp declines although finished off their lows; Greater China benchmarks were mixed with Hong Kong dipping into the close, the Shanghai Composite flat and Shenzhen lower. Australia and India ended down, the Kospi fell late on but the Taiex stayed positive. Southeast Asia was mixed. US futures lower, Europe opened with further steep losses. US dollar under substantial pressure again, NZD and AUD the Asia gainers, yen weaker as JGB yield pressure builds, rupiah and rupee at record lows. Treasury yields mixed with yields higher at the long end; JGB long-dated yields reaching record highs, IGB yields fell on expectations of further RBI liquidity injections. Crude oil futures quiet, precious metals surging on geopolitical concerns. Base metals under pressure. Cryptocurrencies down.

  • Asia equities again on the defensive Tuesday as the risk-off mood continued on geopolitical developments, and as Japanese traders calculate the costs of PM Takaichi's fiscal spending pledges. Long-dated JGB yields surged to record highs with shorter tenor notes also higher as concerns grew over scale of JGB issuance to cover election promises, particularly post her pledge to cut food GST to zero for two years. The yen weakened again although was supported for a time by a notably weaker US dollar and signs the BOJ may warn of further rate hikes to support the currency this Friday. Geopolitical tensions remain elevated and focused on Europe and Greenland after President Trump doubled down during Asia trading hours on his assertion the territory should belong to the US; the comments weighed on long-dated Treasuries and is putting the US dollar under considerable pressure.

  • In other news, China held its 1Y and 5Y LPRs steady as widely expected but consensus is notably shifting in favor of monetary easing during Q1 on top of further selective easing plans. Its state planner said Beijing would roll out new domestic consumption support measures this year, without giving details. Malaysia exports increased more than 10% y/y to a record high in December to easily beat estimates but inflation hit an almost year-long high at 1.6%. The Indonesia rupiah sank to a record low after the country's President Prabowo nominated his nephew for a senior Bank Indonesia role.

  • China regulators have widened their investigation into PDD Holdings (PDD) after several of its employees began a fist-fight with regulators. TikTok owner ByteDance is embarking on an aggressive push into China's cloud market with steeply discounted prices and bespoke AI agents, according to a FT report. BHP Group (BHP.AU) said iron ore output was up 5% y/y in Q2 as it reiterated FY guidance.

• Digest:

  • China keeps LPRs steady as expected as brokers tilt to Q1 easing:

    • China kept its benchmark lending rates unchanged for eighth consecutive month Tuesday, leaving 1-year LPR, linked to household and corporate borrowing, at 3.0%; 5-year, linked to mortgages, at 3.5% as fully expected by economists. Comes week after PBOC lowered sector-specific lending rates, announced support plans for SMEs, tech innovation firms et al in signal it was targeting sectoral easing while also signaling it was open to lowering banks' RRRs and base policy rate in H1 to support growth. Also comes day after data showed China hit annual growth target of 5% despite slower Q4 growth and weak monthly activity that included sharp investment decline, continued house prices slide, retail sales growth stagnation. Reuters noted several economists believe policy rate cut possible in Q1, which would drag LPRs lower. Said if Beijing reiterates pro-growth signal, policy easing possible sooner rather than later.

  • Japan consumption tax cut stands to deepen fiscal hole:

    • Nikkei discussed the ruling coalition proposal to scrap the consumption tax on food for two years. While meant to provide cost of living relief, article cautioned a continuation of yen depreciation and higher long-term yields would only increase the burden on households and the economy. LDP course correction (previously opposed to a tax cut in favor of cash handouts) was motivated by the Centrist Reform Alliance's (CRA) pledge to apply no consumption tax on food. Financial markets becoming more concerned with both ruling and opposition parties leaning towards tax cuts. A 0% tax on food is estimated to reduce annual tax revenues by some JPY5T ($31.6B). In the absence of a sustainable alternative revenue source, this will deplete funding for social welfare. So far, guidance is limited to a commitment for a general review of revenue-expenditure matching. While options are being considered that do not rely on deficit-covering bond issuance, the article warned that filling a JPY5T gap will be challenging. Additionally, the Takaichi administration has yet to fully reconcile the revenue shortfall from the recent abolishment of the gasoline surcharge and free high school tuition initiatives, appropriating JPY1.4T in funding through provision tweaks and spending cuts out of a required JPY2.2T. CRA has been somewhat more forthcoming, pointing to proceeds from a new government-affiliated fund that could sustain a 0% tax on food permanently, though this is uncertain. Report cited NRI estimates that a 0% consumption tax on food would contribute 0.22% to GDP for a year but boost would be negligible from the second year onwards.

  • Japan PM Takaichi's low bar for election victory:

    • Nikkei digest of Prime Minister Takaichi's press conference Monday evening highlighted her underwhelming goal to attain majority control of the lower house as a coalition. With the LDP's 196 seats and JIP's 34, this only requires a gain of just three seats, raising questions as to why Takaichi would risk so much in a snap election for such little upside. Target also seems modest given her high approval ratings stimulated hopes for major gains. Takaichi cited the need for political stability to enable policy implementation. While a coalition majority technically contributes to that, article noted the coalition still lacks a majority in the upper house, requiring a more resounding victory to mandate LDP policies. Story outlined other milestones, such as an LDP standalone majority requiring 37 more seats that would provide more leverage when negotiating with coalition partner JIP. But the more meaningful thresholds are a 'stable majority' of 243 total coalition seats that grants chair positions in every standing committee with 50% representation in each, or a stronger 'absolute stable majority' of 261 in which the coalition chairs every committee and also holds a majority. Another scenario is a two-thirds majority which would be achieved if the coalition gains 80 seats, which ensures passage of legislation even if bills are rejected in the upper house. Meanwhile, the new Centrist Reform Alliance aims to supplant LDP-JIP as the largest bloc, taking the leading role in Diet proceedings to appoint the prime minister.

  • China to formulate plan to boost domestic consumption; mulling state M&A fund:

    • China's NDRC said country plans to roll out new policies to expand domestic consumption during 2026 to 2030, or the period covering 15th five-year plan, at press conference Tuesday. NDRC officials pointed to strong supply and weak demand as prominent problem in Chinese economy. Added trade-in subsidies to support consumption of goods would continue while emphasizing shift to services sector as key focus. Officials also said China is studying whether to establish a national M&A fund as it pushes for technological breakthroughs (Bloomberg). Said China will strengthen planning and guidance of government investment funds, promote innovation and entrepreneurship without providing further details. Early thoughts suggested the potential new fund will make it easier for early backers to exit at an appropriate time and help guide investment into sectors that are deemed strategically important.

  • Rupiah sinks to record low amid investor concerns over central bank independence:

    • Indonesia's rupiah trading at record low Tuesday, briefly touched 17K per US dollar on concerns over Bank Indonesia autonomy following President Prabowo nomination of nephew for deputy governor role (Bloomberg). Comes after BI last year agreed to partially absorb debt costs of Prabowo's fiscal plans and as Jakarta considers changing bank's mandate. Last week, BI admitted it had supported rupiah in market while forex volatility Tuesday suggests may have intervened again. Bank set to decide on base interest rates Wednesday with economists expecting no change at 4.75%, will further pressure commercial banks to pass on previous cuts (Reuters). Separately, MSCI rule change regarding stock free floats could lead to equity withdrawal of $2B from Indonesia stock markets, according to analysts cited by Bloomberg. Country already has Asia's lowest free float with potential change cutting this further; investor exit will likely lead to additional pressure on rupiah, economists said.

  • Notable Gainers:

    • +9.1% 9992.HK (Pop Mart International Group): buys back 1.4M shares in first repurchase since 2024

    • +7.5% 600219.CH (Shandong Nanshan Aluminum): to invest $436.6M (CNY3.06B) in 250Kt capacity electrolytic aluminum production base in Indonesia

    • +4.6% 8368.JP (The Hyakugo Bank): activist Ariake Capital holds 5.1% stake

    • +3.7% 1880.HK (China Tourism Group Duty Free): acquires DFS Greater China retail business for up to $395M, issues H shares to LVMH & Miller family entities

    • +3.2% 006650.KS (KOREA PETROCHEMICAL IND): reports FY results; revenue KRW3.348T vs FactSet KRW3.392T

    • +2.8% 4507.JP (Shionogi & Co.): to invest $2.13B (¥334.79B) to acquire additional 11.7% stake in ViiV Healthcare

    • +1.5% 006040.KS (DONGWON INDUSTRIES): clarifies and confirms reviewing multiple M&A opportunities and the value of StarKist

  • Notable Decliners:

    • -9.3% 688599.CH (Trina Solar): guides FY net income attributable (CNY6.50-7.50B) vs FactSet (CNY4.65B)

    • -2.0% BHP.AU (BHP Group): reports Q2 production; confirms total investment estimate for Jansen Stage 1 will increase to $8.4B and first production schedule has reverted to original schedule of mid CY27

    • -1.0% 3993.HK (CMOC Group): launches $1.20B zero coupon convertible bonds due 2027

• Data:

  • Economic:

    • No economic data today

  • Markets:

    • Nikkei: (592.47) or (1.11%) to 52991.10

    • Hang Seng: (76.39) or (0.29%) to 26487.51

    • Shanghai Composite: (0.35) or (0.01%) to 4113.65

    • Shenzhen Composite: (22.29) or (0.83%) to 2677.79

    • ASX200: (58.60) or (0.66%) to 8815.90

    • KOSPI: (18.91) or (0.39%) to 4885.75

    • SENSEX: (468.96) or (0.56%) to 82777.22

  • Currencies:

    • $-¥: +0.09 or +0.06% to 158.1620

    • $-KRW: +2.81 or +0.19% to 1476.3700

    • A$-$: +0.01 or +0.91% to 0.6744

    • $-INR: +0.22 or +0.24% to 90.9253

    • $-CNY: (0.01) or (0.16%) to 6.9578