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StreetAccount Summary - Asian Market Recap: Nikkei (2.38%), Hang Seng (0.70%), Shanghai Composite (0.74%) as of 04:10 ET

Apr 02 ,2026

• Synopsis:

  • Asia equities ended largely lower Thursday as markets reacted negatively to Trump's speech on the Iran war. The steepest losses were in South Korea, which pared much of Wednesday's gain while Taiwan's Taiex and Japan's two main benchmarks also finished lower. The Hang Seng was sharply down although off its lows, mainland China boards ended lower but were again relative outperformers. Southeast Asia was mostly lower, India seeing some steep reversals particularly in pharma names. US futures opened higher but now down, Europe lower in the first hour. US dollar higher with DXY index back above 100; yuan, yen and won notably weaker, AUD and NZD also down; rupee stronger after heavy RBI intervention. Treasury and JGB yields higher across tenors, other Asia sovereign yields higher. Crude futures reversed early losses to trade higher, Brent back above $108/bl. Precious metals paring yesterday's rally, copper and aluminium lower on threat of demand destruction from gulf conflict. Cryptocurrencies down across the board.

  • Asia equities Thursday roiled by President Trump's speech that took place just after most markets had opened, with most benchmarks paring early gains to trade sharply lower. Brent crude futures reversed early losses while bond yields moved higher, and gold and silver prices sold off very sharply. Trump claimed the conflict was 'very close' to completion but gave no hard timeline for withdrawal, adding Iran would be hit 'extremely hard' over the next two-to-three weeks. Trump also reiterated his threat against Iran's civilian infrastructure and repeated the reopening the Strait of Hormuz was the responsibility of other nations. The Iranian military responded to the speech saying 'bigger, wider and more damaging attacks' were coming soon while the NYTimes separately cited US intelligence saying Tehran saw no need for serious talks amid a belief it had leverage.

  • In separate developments, regional pharmaceutical stocks including many in India under noticeable pressure, after the US threatened drugmakers with fresh tariffs unless they agreed a deal guaranteeing low prices. South Korea defense stocks rose on the threat from Trump to withdraw the US from NATO despite political analysts saw this as unlikely given the political landscape in teh US at present. The rupee bounced the most in 12 years after the RBI launched two measures to halt corporate forex arbitrage, which had been triggered by its own move last week to limit speculative rupee bets from forming. South Korea March inflation ticked higher on the back of higher fuel prices but was below expectations.

  • Stellantis said it was in talks to make Leapmotor Technology (9863.HK) EVs at an idle Canadian plant. Uber is said to be considering buying a controlling stake in Kakao Mobility (Kakao, 035720.KS). Hyundai Motor (005380.KS) posted monthly March sales lower y/y as domestic sales weighed on South Korea revenue, and high oil prices weighed on overseas sales.

• Digest:

  • Trump's Iran address hints at war escalation if no deal reached:

    • Volatile session driven by President Trump's update on Iran war (Reuters, Bloomberg). Trump touted US military victories in the campaign, saying core strategic objectives nearing completion with strikes to continue for another 2-3 weeks. While his speech was mostly in-line with press leaks and a rehash of his prior statements, there was less emphasis on negotiations that left impression of an unclear pathway to ending conflict. This weighed heavily on risk sentiment with stocks swinging lower, and bond yields backing up alongside rally in oil.

    • Some attention to Trump's rhetoric after he warned Iran will be "hit extremely hard", reprised threat to destroy energy generating plants if no deal reached and mused about targeting oil sites. This reinforced concerns about war escalating if ceasefire talks go nowhere with both sides apart on ceasefire demands and having threatened to broaden campaign to energy and other economic targets, underlining risk of still-higher oil prices and mounting pressure on supply chains.

    • No clarity on Strait of Hormuz either with Trump repeating his call for other countries to take responsibility and claiming Strait will open naturally when conflict ends. However, Iran signaling no intent to loosen its grip with IRGC insisting it remains in control and moving to charge shipping tolls. There appears to be little appetite among US allies to get involved militarily. Gulf states also view Iranian control over Hormuz as unacceptable with UAE calling on UN Security Council to authorize action to reopen Strait, including use of force (Bloomberg).

    • Preceding market rally based on hopes for de-escalation after Trump said war could end soon and not conditional on Iranian agreement. Press sources further noted US in talks with Iran about ceasefire on condition Strait of Hormuz is opened (Axios, Bloomberg). However, Iran's Foreign Ministry denied Trump's claim it asked for ceasefire and US intelligence sources told NY Times they assess Iran unwilling to engage in serious talks amid belief they have the leverage.

  • Japan saw record equity outflows last week, but global investors lack alternatives:

    • MOF weekly portfolio flows data showed foreign investors dumped a record net JPY4,862.3B in Japan equities last week, far beyond the prior all-time high JPY3,025.5B during Sep-23. Latest outflow was enough to turn the YTD total negative. This came on top of large net selling in the previous two weeks. Combined with large net sales of JPY2,646.3B in JGBs, total net portfolio outflows were also a weekly record. Attention turns to TSE data, which also includes futures. By that measure, foreign investors had bought cumulative JPY5T YTD through the first week of March though were recently notable net sellers. While global risk aversion has been the main theme triggered by the war in Iran, foreign investors have been particularly concerned with Japan's oil dependence, while also being a source of profit-taking with stocks recently pushing further into record highs. Nikkei separately discussed how Nikkei 225 has been one of the worst-performing markets among broader asset classes since the war in Iran began, though the current phase has been characterized by a distinct lack of havens, with US Treasuries and gold also off their recent peaks. Dollar has strengthened, though more out of demand for a reserve currency in cash rather than a rotation into other local risk assets. Yuan has held firm, seen as a reflection of perceptions that China is insulated from Middle East/crude oil developments.

  • PBOC withdraws cash from financial systems for first time in nearly a year:

    • PBOC drained net CNY890B ($129B) worth of liquidity via 7D reverse repo operations in March and withdrew another CNY250B through longer-term tools including outright reverse repos and MLF operations, which Bloomberg's calculations showed China's commercial banks likely recorded their first net repayment of central bank loans since May-25, marking sudden reversal from buildup in liquidity for months as policymakers guided economy that posted weakest growth in Q4-25 in three years. Meanwhile as Chinese economy got off to a relatively strong start in 2026 with trade and manufacturing holding up in March even after war in Iran broke out, PBOC has turned more vigilant and economists said policymakers "saving bullets" for future as external uncertainties remain high. PBOC reaffirmed policy stance as "moderately loose" at Q1 quarterly meeting last week while economists are divided about their policy moves. Some have pushed back expectations for next cuts to interest rates and RRR, although unlikely to tighten policy just yet and others still anticipate at least cuts in required reserves, continuation of CGB purchases.

  • Rupee surges after RBI moves to halt arbitrage trades:

    • India's rupee surged most in 12 years early Thursday to 93.2 per dollar after RBI late Wednesday moved to cap corporate arbitrage trades (BusinessStandard). Measure bars banks offering rupee denominated non-deliverable forwards (NDFs) to domestic, overseas corporate clients; reduces arbitrage opportunities by weakening link between onshore and offshore markets. Second measure prevents rebooking of cancelled forward contracts that rollover, reprice positions and used as speculative trading under hedging guise. Together, measures halt surge in corporate driven arbitrage activity by effectively tightening oversight, limiting ability for leveraged trades against rupee (Bloomberg, Reuters). Monday's surge in arbitrage trades triggered by RBI's move last Friday to cap net open positions banks can hold in onshore deliverable markets that limited banks' ability to run large dollar prop positions; this initially caused rupee to strengthen before corporates moved in to exploit dislocation, according to Reuters report Monday.

  • Street Takeaways: March BOJ Tankan

    • Attention on the March BOJ Tankan survey was essentially about gauging Middle East impacts. Economists broadly cautioned the survey target date of 12-Mar meant that results did not fully capture the fallout. Yet, while takeaways included a certain amount of latitude, there wasn't much extrapolation of weakness in the results, nor was there enough conviction to completely discount areas of strength. So, while information was widely regarded as incomplete, the silver lining was that there were no compelling indications of an impending shock to corporate activity for now. The greater risk was seen coming from an extended duration of high crude oil prices. Hence, the resilience in headline business confidence among large firms was viewed as genuine. Lower outlook DIs came as a possible warning signal, though was inconclusive as to how much of this reflected the Middle East element or simply a technical bias. Exogenous factors aside, domestic dynamics remained broadly intact. Most views were sanguine on the relatively slow start to FY26 large firm capex, still described as solid. Inflation metrics were positive with inflation expectations edging higher. Not much was made of the relative strength in input prices vs output prices or whether this was an extension of oil prices. Employment DIs continued to indicate historic labor shortages. Overall, implications on BOJ rate hike expectations were limited. While the Tankan alone is unlikely to seal the BOJ's decision for any month, those in the April camp notably stood by their calls.

  • Notable Gainers:

    • +8.2% 601872.CH (China Merchants Energy Shipping): Oil prices surge after US president Trump says the Iran campaign is nearing completion, but that strikes will continue for another 2-3 weeks

    • +6.7% 064350.KS (HYUNDAI ROTEM): US threatens NATO exit as Europe refuses to back Iran war

    • +4.2% 9688.HK (ZAI Lab): announces clinical trial agreement with Amgen for lung cancer

    • +2.5% 7564.JP (Workman): reports March same-store sales +22.7% y/y

    • +2.2% 4519.JP (Chugai Pharmaceutical): FDA approves Eli Lilly's Foundayo

  • Notable Decliners:

    • -9.9% 032350.KS (Lotte Tour Development): reports March casino revenue; hotel sales (9.9%) m/m

    • -9.6% 4506.JP (Sumitomo Pharma): Trump administration reportedly prepared to impose 100% tariffs on certain medicines

    • -6.1% 6857.JP (Advantest): to issue ¥100.00B zero coupon convertible bonds due 2031

    • -5.9% 005930.KS (Samsung Electronics): South Korean semiconductor sector move following US president Trump's speech

    • -5.9% 035720.KS (Kakao): Uber reportedly considering acquiring controlling stake in Kakao Mobility

    • -4.6% 005380.KS (Hyundai Motor): reports March global sales 358,759 units vs year-ago 367,336 units

• Data:

  • Economic:

    • South Korea March

      • CPI +2.2% y/y vs FactSet consensus +2.4% and +2.0% in prior month

        • CPI ex-food & energy +2.2% vs +2.3% in prior month

    • Australia February

      • Trade balance A$5.69B vs consensus A$2.85B and revised A$2.26B in January

        • Exports +4.9% y/y vs (0.9%) in January

        • Imports (3.2%) y/y vs +0.8% in January

  • Markets:

    • Nikkei: (1,276.41) or (2.38%) to 52463.27

    • Hang Seng: (177.50) or (0.70%) to 25116.53

    • Shanghai Composite: (29.27) or (0.74%) to 3919.29

    • Shenzhen Composite: (40.98) or (1.59%) to 2536.25

    • ASX200: (92.30) or (1.06%) to 8579.50

    • KOSPI: (244.65) or (4.47%) to 5234.05

    • SENSEX: (803.08) or (1.10%) to 72331.24

  • Currencies:

    • $-¥: +0.79 or +0.49% to 159.6120

    • $-KRW: +2.31 or +0.15% to 1515.3200

    • A$-$: (0.01) or (0.73%) to 0.6878

    • $-INR: +0.16 or +0.17% to 92.8013

    • $-CNY: +0.02 or +0.27% to 6.8914