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StreetAccount Summary - Asian Market Recap: Nikkei +2.20%, Hang Seng +0.66%, Shanghai Composite +0.72% as of 03:10 ET

Feb 25 ,2026

• Synopsis:

  • Asia stocks ended largely higher Wednesday with the MSCI Asia Pac ex Japan index touching a fresh record high. Japan's Nikkei also finished at a fresh record and its Topix was also higher, South Korea's Kospi broke 6K for the first time and just a month after it breached 5K; Taiwan's Taiex also at a new record. More gains for mainland China, Hong Kong also higher today. India paring early gains. On the downside, Singapore fell as some of its bank stocks weighed. US futures higher, Europe opened with gains. US dollar weaker, Asia currencies broadly higher led by yuan, AUD and NZD. Treasury yields higher across tenors, JGBs mixed. Crude blends slightly higher, precious metals very strong as the dollar weakens. Iron ore and copper both higher. Cryptocurrencies rallying but off peaks.

  • Asia equities enjoying a largely positive day following a solid session on Wall Street overnight on easing fears over the impact of AI on software companies. Followed a constructive comment from Anthropic, Meta's chip deal with AMD, and optimism over strong earnings growth at AI-chip related stocks just ahead of Nvidia earnings post the close Wednesday. The region given additional support today from stronger currencies which collectively saw a closely-followed benchmark index reach a 16-month high. Very little market reaction to President Trump's State of the Union address, which took place during Asia's morning session.

  • In regional developments, Australia January inflation held steady at 3.8% but beat consensus forecasts and was well above the RBA's target rate with markets continuing to pencil in May for the RBA's next rate hike. Japan PM Takaichi nominated two reflationists to the BOJ board following a report Tuesday afternoon that she had voiced concern over further rate hikes. Meanwhile, Japan service inflation held steady reflecting the impact of high wages on prices. The Bank of Thailand surprised with a 25 bps cut to base rate against expectations of a no-change; the bank said it needed to provide support to the economy given downside risks on the government's budget among other issues. South Korea said childbirths grew at their fastest rate in 15 years in 2025 but the fertility rate remains well below replacement level while the overall population declined by more than 100K.

  • Lone Star and Bain Capital said to be among the shortlisted bidders for the acquisition of Mitsubishi Electric's (6503.JP) automotive equipment business. Tokyo Electron (8035.JP) is aiming to leverage its network of 160 South Korea suppliers to meet chip demand. Nippon Steel (5401.JP) plans to sell almost $4B of convertible bonds to fund its US Steel acquisition. Chevron has sold Venezuelan oil to Reliance Industries (500325.IN) for first time since 2023. Geely Auto (175.HK) says it wants to focus on longer-range, faster-charging technology rather than start another price war.

• Digest:

  • Dovish market reactions to BOJ board nominations:

    • Yen weakened, providing a boost for equities on the back of the nominations of Chuo University Professor Emeritus Toichiro Asada and Aoyama Gakuin Professor Ayano Sato to the BOJ policy board. Superlong JGBs sold off after the announcement as dovish implications stoke further behind-the-curve worries. Nominees set to replace Akira Noguchi and Junko Nagakawa whose terms expire on 31-Mar and 29-Jun respectively. Proposals need to be approved by both houses of parliament. Bloomberg noted the nominees' reputation as reflationists after previewing the attention on this announcement to see whether Prime Minister Takaichi would inject more members aligned with her own dovish stance. Noguchi was a stanch advocate of monetary easing (until around September when his speeches turned more balanced) and replacing him with another dove came as no surprise. Nakagawa has never voted against the board's policy decisions, and her successor was seen to be a bigger potential swing factor. While a more balanced selection was an option if Takaichi sought to coax investor calm, while an additional dovish appointment would be interpreted as an unmistakable message supporting monetary stimulus. Still, early takes generally downplayed the significance (Nikkei). While acknowledging the nominations did reflect Takaichi's caution against rate hikes, they did not tilt the profile of the MPC in a meaningfully reflationist direction. Hence, the normalization trajectory is likely to remain on track. Moreover, recent softening in rate hike expectations on the margins has as much to do with renewed US tariff uncertainties as the infusion of reflationists into the MPC. Earlier report on Takaichi's growing aversion to rate hikes in her meeting with BOJ Governor Ueda last week also helped prime the yen market to fade March or April rate hike scenarios.

  • Japan PM Takaichi said to have been colder on rate hikes with Ueda:

    • Mainichi article published after hours Tuesday cited multiple sources as saying Prime Minister Takaichi expressed reluctance toward further rate hikes at the meeting with BOJ Governor Ueda on 16-Feb. Following the discussion, neither disclosed anything notable. Article recalled Takaichi at a 18-Feb press conference said the meeting was part of their regular exchange of views and declined to comment on specifics, echoing comments by Ueda. Takaichi added she "expects BOJ to continue working closely with the government and conduct appropriate policy in order to achieve the 2% price stability target driven by wage growth rather than cost-push factors." While Ueda noted there were no specific policy requests, sources indicated Takaichi's stance on rate hikes has hardened since the two last met in November. Report noted perceptions that Takaichi is opposed to monetary tightening and has placed reflationists into the Council for Economic & Fiscal Policy. Also recalled indications from her October press conference after winning the LDP leadership that she was prepared to exercise influence on monetary policy with a quote that the government must take responsibility for fiscal and monetary policies. Story also mentioned market expectations with most looking for a rate hike by June. While some have raised a March hike scenario to contain excessive yen depreciation, coordination with the government may prove difficult.

  • Higher US tariffs evidently leading to rampant tariff dodging:

    • Bloomberg feature story discussed evidence of major tariff evasion on goods flowing into the US from China. Data compared official US customs imports from China with a much higher level of China's reported exports to US, leading to a record $112B gap which equates to about a quarter of China's shipments. Article noted tariff evasion has frustrated the US government for years and this discrepancy now dwarfs the levels seen during President Trump's first term. Cited past Fed analysis which found nearly two-thirds of such gaps stemmed from tariff evasion while mentioning other factors such as China's tax rebate policy. Article suggested tariff dodging schemes raise doubts about whether Trump's tariffs can deliver on his promise to revive American manufacturing. Anecdotal examples showed advertised shipping rates too low to indicate tariffs were included. Another arrangement sees shippers offering to share the tariff costs between buyer and seller. Highlighted one method to avoid tariffs through a mechanism called Delivered Duty Paid, where the seller handles the logistics including tariffs, and fraud occurs when goods are deliberately undervalued or misclassified for a more favorable tariff rate. Shell companies or non-resident entities are often the importer of record, making law enforcement difficult. Efforts in Washington to address the issue has so far seen slow progress.

  • Australian inflation higher-than-expected, keeping RBA rate hike bets in play:

    • Australia headline inflation remained at 3.8% y/y in January against forecast for a drop to 3.7%. RBA's preferred trimmed mean inflation rose to 3.4% from prior month's 3.3% (also consensus). Domestically driven pricing pressures intensified with non-tradeables inflation rising to 4.9% from 4.6%. Goods inflation climbed to 3.8% from 3.4%, driven by clothing and footwear category. Housing group a major contributor with electricity inflation rising to 32.2% from 21.5%, reflecting winding down of government energy rebates. Rising housing construction costs also played a role. Non-discretionary inflation rose to 4.1% from 3.9%, underlining continued stickiness in health, education and insurance categories. Data drove hawkish market reaction with Australian yield curve bear flattening. Prior to data, markets were pricing in more than 70% chance of May rate hike. Also pricing in 60% chance of third rate hike by November. CPI result heightens focus on RBA Governor Bullock's speech later on Wednesday (19:40 AEDT) after she warned at recent parliamentary hearing that central banks is ready to tighten again if inflation proves persistent.

  • China aims to ramp up output of advanced chips, but faces familiar hurdles:

    • Nikkei sources said China's SMIC (981.HK), Hua Hong Semiconductor (1347.HK) and other Huawei-linked chipmakers aiming to ramp up production of 7nm or 5nm semiconductors to support AI chip developers. Sources said China aiming to produce 100K wafers in 1-2 years from less than 20K currently, before boosting capacity by 500K by 2030. Chips would be more advanced than what China currently produces but still generations behind most cutting-edge technology produced by TSMC (2330.TT). China also restricted from accessing cutting edge chipmaking equipment such as ASML's EUV tools, which may leave its production targets out of reach while even its aimed-for output is considered unlikely to pose immediate threat to global chip leaders. Meanwhile, access to Nvidia (NVDA) H200 chips still yet to materialize months after President Trump greenlit their exports. Commerce Department official told House Foreign Affairs Committee that no H200 chips have been sold to China yet (Reuters). This would fit with reports Beijing has so far resisted H200 imports in favor of prioritizing domestically produced chips while US conditions on sale of H200s also acting as deterrent.

  • Notable Gainers:

    • +12.7% 000270.KS (Kia Corp.): reaches 5M hybrid electric vehicle production milestone at Georgia plant

    • +5.5% 5.HK (HSBC Holdings): reports FY results; revenue $68.30B vs consensus $67.36B, EPS $1.20 vs consensus $1.16

    • +3.9% 2692.JP (Itochu-Shokuhin): Itochu reportedly plans to buy all remaining shares in Itochu-Shokuhin for ¥80B through tender offer

    • +1.4% 8227.JP (SHIMAMURA): reports February Shimamura existing store sales +10.2% y/y

    • +1.3% 293.HK (Cathay Pacific Airways): reports January traffic +12.3% y/y

    • +0.6% 981.HK (SMIC): SMIC, Hua Hong Semiconductor and other Huawei-linked chipmakers reportedly aiming to ramp up production of 7nm or 5nm semiconductors to support AI chip developers

  • Notable Decliners:

    • -11.1% 214150.KS (CLASSYS): Bain Capital reportedly sells 8% stake via block trade for around KRW310.0B

    • -7.6% G13.SP (Genting Singapore): reports FY adjusted EBITDA SG$815.8M vs FactSet SG$893.2M

    • -5.5% 5401.JP (NIPPON STEEL): to issue ¥275B zero coupon convertible bonds due 2029 and ¥275B zero coupon convertible bonds due 2031

    • -4.6% 8233.JP (Takashimaya): guides FY net income attributable (¥10.50B) vs prior guidance ¥13.00B and FactSet ¥32.05B

    • -2.3% 4062.JP (IBIDEN): to conduct 6.9M-share secondary offering

    • -0.9% 6503.JP (Mitsubishi Electric): Bain Capital, Lone Star reportedly among shortlisted bidders for acquisition of Mitsubishi Electric's automotive equipment business

• Data:

  • Economic:

    • Japan

      • January services PPI +2.6% y/y vs consensus +2.6% and +2.6% in prior month

    • Australia

      • January CPI +3.8% y/y vs consensus +3.7% and +3.8% in December

        • Trimmed mean CPI +3.4% y/y vs consensus +3.3% and +3.3% in December

      • Q4 construction work done (0.1%) q/q vs consensus +1.2% and (0.7%) in Q3

  • Markets:

    • Nikkei: 1,262.03 or +2.20% to 58583.12

    • Hang Seng: 175.40 or +0.66% to 26765.72

    • Shanghai Composite: 29.82 or +0.72% to 4147.23

    • Shenzhen Composite: 32.88 or +1.21% to 2746.26

    • ASX200: 106.00 or +1.17% to 9128.30

    • KOSPI: 114.22 or +1.91% to 6083.86

    • SENSEX: (4.99) or (0.01%) to 82220.93

  • Currencies:

    • $-¥: +0.10 or +0.06% to 156.0030

    • $-KRW: (10.25) or (0.71%) to 1431.1700

    • A$-$: +0.00 or +0.65% to 0.7104

    • $-INR: (0.05) or (0.06%) to 90.9026

    • $-CNY: (0.02) or (0.26%) to 6.8664