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StreetAccount Summary - Asian Market Recap: Nikkei +5.58%, Hang Seng +1.57%, Shanghai Composite +0.48% as of 04:10 ET

May 07 ,2026

• Synopsis:

  • Asia equities ended higher almost everywhere for a second day Thursday and are set for a strong weekly return. Japan's main benchmarks led the region as they partly catch up post holidays and on a further surge in its tech-related names. Hong Kong, mainland China and Taipei all ended higher, Kospi rose again after paring an early loss. Australia and Southeast Asia all higher, India flat. US futures trading higher, Europe markets higher in the opening hour. US dollar slightly lower, Asia currencies stronger in afternoon trade. Treasuries and JGBs mixed. Crude oil futures sharply lower in late trade; Brent below $100/bl. Precious metals higher, base metals hovering around the unchanged mark.

  • Asia equities strong again Thursday as markets appear convinced the US and Iran are edging towards a deal that will see the Strait of Hormuz reopen and hostilities end. Traders seeing an extra boost late on as oil dipped sharply with both Brent and WTI below $100 per barrel. No substantial newsflow through the day on conflict with Washington presenting Tehran with a one-page memo outlining conditions for a ceasefire that would formally end the war and begin longer-term discussions to unblock the Strait of Hormuz, and for the US to lift sanctions.

  • The improved sentiment supporting equity markets and giving bonds and currencies a boost too. Today, Japan's markets surged after they returned from a break with Softbank (9984.JP), Tokyo Electron (8035.JP) and Renesas (6723.JP) among the notable gainers, joining other AI-related Asia stocks that had surged earlier in the week. In other developments, Australia posted its first monthly trade deficit in nearly eight years in March, missing expectations for a surplus due to a surge in imports which reached a record high. Philippines Q1 growth slowed to 2.8% y/y, below forecasts and Q4's 3.0%, on a sharp contraction in investment and a spike in fuel costs. Bank Negara Malaysia kept its base interest rate steady at 2.75% as widely expected and said it saw inflation 'contained' despite the middle east conflict. BoJ minutes showed policymakers had discussed a rate hike last week in wake of inflationary pressures from Iran war.

  • Tosoh Corp (4042.JP) to begin mass production of optical cables for data centers from 2029 and have seized accounting records and other materials, according to reports. BYD (1211.HK) could face an import cap in Canada as Ottawa is set to calculate a new China EV quota. Korean authorities are to launch a tax probe into Korea Zinc (010130.KS). UOB's (U11.SP) CEO said a profit dip in Q1 results reflected 'elevated' global uncertainty as firms navigate the fallout from the Iran war and higher prices. Australia's financial crime watchdog launched a probe into Tabcorp (TAH.AU) over money laundering risks. A law-firm review of HDFC Bank (500180.IN) found no substantive governance concerns following chairman's exit, paving the way for the reappointment of its CEO. AirAsia's (5238.MK) CEO said he is preparing to launch a new airline within the next few months, comes day after airline ordered 150 Airbus A220 planes.

• Digest:

  • US and Iran reportedly aligning on deal to end war:

    • Markets welcomed signs of fresh momentum in US-Iran peace talks amid reports two sides nearing agreement on 14-point MoU to end war and set in motion 30-day negotiation period to discuss opening Strait of Hormuz, limit Iran's nuclear program and lift US sanctions (Axios, Reuters, Bloomberg)). Per proposal, Iran would commit to not pursuing nuclear weapons, agree to enhanced inspections and remove HEU stockpiles from country. US would gradually unfreeze Iranian funds. Iran expected to respond to US proposal this week.

    • Trump optimistic about prospect of agreement in coming days, repeating claim Iran has agreed to abandon nuclear weapons. Questions surround timeline of any enrichment freeze with Tehran reportedly offering 5-year moratorium and US demanding 20 years (US officials said 15-year freeze a likely landing point). Iran has so far refused to turn over HEU stockpiles, though some thought Foreign Minister Araghchi's visit to Russia and China could see them involved. Iran's insistence on controlling Strait of Hormuz the other major sticking point. Publicly, Iran dismissed Axios report with unnamed sources describing some US terms as unacceptable.

    • Some thought Trump under time constraints to seal agreement before his visit to Beijing next week. Commentators pointed out failure by Trump to secure deal before his visit would hand President Xi additional leverage over Trump and position him as the peacemaker (Bloomberg). China Foreign Minister Wang stressed importance of complete cessation of hostilities and resumption of passage through Strait of Hormuz (Reuters).

    • Crude sold off on headlines with WTI and Brent back to late April lows. There remains skepticism whether an agreement will come to fruition with two sides having been far apart on their competing list of demands to end war. Trump's past claims about consensus on nuclear issue have also been rejected by Iranian hardliners. Physical crude market continues to tighten in the meantime, heightening concerns about a more damaging hit to global economy if two sides cannot end their impasse and agree to reopen Strait of Hormuz.

  • Bessent to discuss yen in Japan visit next week, FX chief Mimura says no limits on intervention frequency:

    • US and Japan sources told Nikkei that US Treasury Bessent will visit Japan for three days from Monday next week to meet with top officials including Prime Minister Takaichi, discussing topics including curbing speculative yen-selling. Bessent will also hold one-on-one meetings Tuesday with Finance Minister Katayama and BOJ Governor Ueda. In addition to currency issues, agenda will cover economic security topics such as rare earths and energy procurement. Iran war could come up as well.

    • Bessent visit to precede a China trip with President Trump on May 14-15 for a meeting with Xi Jinping.

    • Article cited US Treasury Department officials as saying they were in close contact with Japan when an FX intervention operation was conducted last week, indicative of Washington's tacit approval.

    • Bessent has long been wary of speculative yen selling and US officials disclosed the rate check in January was initiated by Bessent rather than Japan. Particular concern over yen and JGB weakness spilling over into US Treasury market.

    • Latest takeaways in light of subsequent yen rallies (two phases on 4-May and 6-May after the first on 29-Apr) widely suspected to have been driven by follow-up operations surmising the trigger point has been raised from 160 per dollar to 157 and the low end of MOF's preferred range appears to be around 155 (Nikkei). Yet, some are unconvinced of multiple operations (recall only the first has been verified by the press) given light volumes during Golden Week leaving the market susceptible to volatility.

    • Moreover, intervention(s) have not impacted market sentiment, which remains bearish based on fundamentals.

    • Speaking to reporters Thursday, FX policy chief Mimura declined to comment on the latest yen rally Wednesday and only said authorities will continue to monitor the situation with the same level of vigilance (Nikkei).

    • In response to an earlier Bloomberg report suggesting intervention operations would be limited to three instances in a six-month span to stay within IMF's definition of a free-floating currency, while also qualifying that multiple operations within three days technically counts as one, Mimura countered with his understanding that there are "no limits on the frequency of intervention."

  • March minutes show BOJ hawks lay in waiting:

    • No major surprises from minutes for the March MPM, largely expanding on the themes conveyed in the preceding Summary of Opinions. Expectations for the economic impact from Middle East conflict were clearly negative with only the magnitude subject to debate and much of this was uncertain depending on crude oil prices and developments in the Strait of Hormuz. Implications for reported inflation metrics were skewed to the upside though symmetric for underlying inflation.

    • However, discussions on monetary policy featured more attention on hawkish views. Minutes unusually laid out the lone dissenter's (Takata) case for a rate hike. Core rate hike stance was supported by all members given financial conditions remained accommodative despite earlier rate hikes and real rates very low, though conviction extended only as far as agreeing to make decisions on a meeting-to-meeting basis.

    • Summary went on to detail three specific hawkish views, urging for policy adjustments without long intervals, growing caution towards a scenario in which underlying inflation continued to exceed 2%, and more explicit behind-the-curve worries.

    • Furthermore, they debated the conventional response to look through temporary supply shocks, and many members were concerned about second-round effects on broader inflation. Notable consensus on how this approach during Russia's invasion of Ukraine gave rise to surging inflation in Europe and US.

    • One member cited similarities with Japan given rates are below neutral and facing a significant inflationary catalyst. A couple of others noted risks could be exacerbated by yen depreciation. Only one member was on the record with the view the risk of underlying inflation accelerating beyond 2% was still low in Japan (albeit if this was Governor Ueda, then he tends to speak for deputy governors and others).

  • Malaysia central bank keeps base interest rate unchanged:

    • Bank Negara Malaysia Thursday kept its overnight policy rate unchanged at 2.75% as widely expected, as it watches for developments from middle east conflict. March inflation print was relatively benign at 1.7%, within bank's forecast, while Q1 growth remained resilient at 5.3% y/y; ringgit relatively benign thanks to exports from country's large electronics sector which buffered negative impact from war.

    • Bank said latest indicators indicate continued growth momentum in Q1 driven by sustained domestic demand, exports but uncertainties from middle east conflict to impact outlook. BNM said consumption will be supported by policy and wage growth, investment sustained by multi-year projects, exports by electronics sector. Expects tourism growth to moderate. Said inflation will remain 'contained' despite higher fuel prices, kept inflation and growth forecasts unchanged. Added MPC believed OPR stance appropriate and consistent with price and growth outlook.

    • Government had previously warned fuel price increases lie ahead but subsidy program has increased seven-fold since start of conflict. BNM had also previously warned over downside risks to growth amid oil price spike and global financial market volatility.

  • China LLM startups drive new round of domestic funding:

    • China's homegrown LLM companies have triggered new waves of funding. Media sources said DeepSeek is raising money from state-backed investors in its maiden fundraising campaign, reversing company's years-long strategy of rejecting outside funding and aligning itself with Beijing's push for tech self-sufficiency. National Artificial Intelligence Fund, founded in Jan-25 as JV between Phase III Big Fund and a Shanghai-based PE fund with CNY60B ($8.8B) in capital, in talks to be lead investor in DeepSeek's funding, which is valued at around $50B in recent talks. DeepSeek plans to use new funds to advance R&D and expand computing infrastructure. Corroborated with earlier FT report although it said valuation was about $45B. Nevertheless, valuation of DeepSeek has surged markedly from a range between $10B and $30B when fundraising talks started only weeks ago (FT). Recall Tencent (700.HK) and Alibaba (9988.HK) were in talks to join first round of financing for DeepSeek at valuation of over $20B in April (TheInformation).

    • Separately, local media (link, link) reported Moonshot AI is about to complete new round of financing of $2B with post-investment valuation that exceeds $20B, led by Meituan Longzhu, China Mobile and CPE Fund. Recall Moonshot AI has just completed three rounds of financing in first two months of 2026, raising total of $1.9B. With latest round, Moonshot AI has highest cumulative financing among China's LLM startups. Recall earlier China has told its AI companies not to accept US investments without government approval (Bloomberg)

  • Notable Gainers:

    • +21.5% 028050.KS (Samsung E&A Co.): analyst notes FY orders expected to hit record KRW15.5T

    • +19.6% 6141.JP (DMG MORI): Q1 actuals, FY guidance for orders beat expectations

    • +11.0% 4042.JP (Tosoh Corp): reportedly to start mass production of optical cables for data centers as early as 2029

    • +7.3% 1929.HK (Chow Tai Fook Jewellery Group): guides FY net income +45-55% y/y

    • +1.2% S58.SP (SATS Ltd.): acquires additional 40% stake in Nanjing Weizhou Airline Food for aggregate consideration CNY312.6M (SG$58.3M)

  • Notable Decliners:

    • -10.7% 010130.KS (Korea Zinc Co.): Seoul Regional Tax Service Investigation Bureau 4 reportedly launch tax investigation on Korea Zinc

    • -6.5% 8136.JP (Sanrio): to postpone FY results, forms special committee to investigate managing director's compensation allegations

    • -5.5% 2413.JP (M3): reports FY results; revenue misses FactSet estimates

    • -2.4% 017670.KS (SK Telecom): reports Q1 results; revenue misses StreetAccount estimates

    • -2.3% 035720.KS (Kakao): reports Q1 results; revenue misses StreetAccount estimates

• Data:

  • Economic:

    • Australia March trade balance (A$1.84B) vs consensus A$4.40B and revised A$5.03B in February

      • Exports (2.7%) y/y vs +4.9% in February

      • Imports +14.1% y/y vs (3.2%) in February

  • Markets:

    • Nikkei: 3,320.72 or +5.58% to 62833.84

    • Hang Seng: 412.50 or +1.57% to 26626.28

    • Shanghai Composite: 19.92 or +0.48% to 4180.09

    • Shenzhen Composite: 33.69 or +1.19% to 2872.24

    • ASX200: 84.50 or +0.96% to 8878.10

    • KOSPI: 105.49 or +1.43% to 7490.05

    • SENSEX: 11.38 or +0.01% to 77969.90

  • Currencies:

    • $-¥: (0.12) or (0.08%) to 156.2730

    • $-KRW: +1.38 or +0.10% to 1446.9300

    • A$-$: +0.00 or +0.35% to 0.7262

    • $-INR: (0.24) or (0.25%) to 94.3750

    • $-CNY: (0.01) or (0.16%) to 6.8007