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StreetAccount Summary - Asian Market Recap: Nikkei +0.52%, Hang Seng (0.22%), Shanghai Composite (0.25%) as of 04:10 ET

May 12 ,2026

• Synopsis:

  • Asia equities ended mostly lower Tuesday. A steep decline for South Korea, more modest losses in India, Australia and Singapore. Indonesia's main index at a 10-month low, other Southeast Asia benchmarks also down. Greater China markets all lower as the Hang Seng pared an early morning rally. Small gains in Japan and Taiwan. US futures lower, European benchmarks opened down. US dollar higher and at the top end of its recent band, Asia currencies weaker but yuan outperforming after the PBOC set its fixing point at its strongest in three years. Treasury yields higher across tenors, JGB 10-year yield breached fresh 29-year high at 2.55% following the BOJ's hawkish meeting minutes. Precious metals down, oil futures higher with Brent above $107/bl, base metals mixed.

  • Asia equities taking a breather Tuesday following a succession of positive sessions and several record highs in major benchmarks. South Korea's Kospi fell around 2.3% amid signs of profit taking triggered by a presidential aide who suggested a 'citizens' dividend' paid for by a tax on AI profits, and a Samsung Electronics labor union representative who reiterated a strike threat over pay. Traders also weighed the latest developments in Iran in which President Trump said he regarded the ceasefire to be on 'life support'; oil responded with a tick higher with brent back above $107 for the first day in five.

  • In other developments, Presidents Xi and Trump are set to meet this Thursday with strategists optimistic an extension to the trade truce on critical minerals alongside deals for new aircraft orders and perhaps one on agriculture. Taiwan and the Iran conflict are also said to be on the agenda. Bank of Japan April meeting minutes leaned hawkish, while a meeting between US treasury secretary Bessent and Japan's finance minister Katayama agreed to continue cooperation on forex intervention. Elsewhere, Malaysia March unemployment remained unchanged at 12-year low; Indonesia retail sales growth fell to 3.4% y/y; Thailand's consumer morale declined to its lowest since Aug-25.

  • Bain Capital and LY Corp have submitted a joint offer to buy Kakaku.com (2371.JP) for $3.7B, a comparable price to that offered by EQT. Hitachi (6501.JP) is looking to sell around 8% of its stake in Hitachi Construction Machinery in bloc sales following the expiry of a 180-day lock-up period. Hengli Petrochemical (600346.CH) is to close its Singapore-based trading arm after the US applied sanctions on the company's refinery last month. Kuaishou Technology (1024.HK) is to spinoff its Kling AI unit valued at around $20B in a listing potentially worth up to $2B. The founder of SMIC's (981.HK) has urged China's semiconductor sector to pursue 'pragmatic breakthroughs in niche markets instead of chasing 2nm hype. Jollibee (JFC.PM) said its Q1 profit sank almost 40% to just $24M despite an increase in revenue as input costs soared.

• Digest:

  • Bessent, Katayama reaffirm close cooperation on currency:

    • Japan Finance Minister Katayama met with US Treasury Secretary Bessent Tuesday and reaffirmed close cooperation in dealing with FX moves, including intervention (Reuters). Katayama said the two sides discussed market developments and confirmed Japan was responding to currency moves in line with the joint statement signed with the US in September, which allowed for FX intervention to combat excessive volatility. Bessent comments on X were broadly consistent, noting level of communication and coordination in addressing undesirable, excess volatility in currency markets continues to be constant and robust. Added they held positive discussions on the US-Japan investment agreement, shared efforts on critical minerals and endorsed Japan's work in building an investment screening mechanism (equivalent to CFIUS). Katayama skirted around a question about whether 'close coordination' meant Washington could take the initiative in addressing sharp yen declines, though did not dismiss the interpretation. She declined to comment when asked if BOJ policy was discussed. Talks were generally in line with previews that indicated they would agree that Japan's actions were consistent with their agreement. They were also expected to discuss policies to build a rare earth supply network to reduce reliance on China as well as financial system cybersecurity risks from AI, specifically international access to Anthropic's Claude Mythos. A separate Nikkei editorial suggested Bessent will leave Japan early to prepare for the US state visit to China on May 14-15 and may postpone a meeting with BOJ Governor Ueda.

  • April BOJ Summary of Opinions skewed hawkish:

    • Summary of Opinions for the April BOJ policy meeting skewed hawkish. Some back and forth in economic developments amid Middle East effects, though deliberations advanced from March as officials needed to update their baseline outlook scenario for the Outlook Report. This included a recognition Middle East would pose a headwind to economic growth without derailing constructive domestic dynamics.

    • While terms of trade seen likely to deteriorate, wide differentiation among sectors made it difficult to make any firm conclusions. Also acknowledged the risk of more broad-reaching supply chain constraints beyond crude oil and petrochemicals.

    • Inflation discussions focused on upside risk, which set the tone for policy views. Concerns were raised that economic conditions are now more sensitive to inflationary catalysts following an extended era of a policy mix devoted to overcoming deflation.

    • One member saw core CPI inflation dipping below 2% in March as a justification to remain on hold in March, citing adaptive formation influencing inflation expectations. However, another suggested underlying inflation was approaching 2% and the majority of other comments implied this was the central view. Debate evolving over the pace at which the trend was likely to overshoot.

    • One remark proposed the tweak to the language in forward guidance that policy adjustments should continue "in accordance with improvement in economic activity and prices," citing the likelihood of actual growth momentum generally matching potential growth for the time being (this change was a notable talking point among economists).

    • In contrast, a few members tempered the urgency to hike for the moment, one arguing that a move now to prioritize the containment of inflation is highly likely to adversely impact the economy. Others were comfortable with holding off for now given Middle East uncertainties and the low risk of a runaway wage-price spiral. Yet they also signaled a rate hike may be warranted soon, as early as the next MPM, even if Middle East uncertainties persist.

    • Another noted financial markets were stable enough to proceed with a hike, while firms' price-setting behavior has become more active and risks to prices skewed to the upside. A member highlighted Japan has the lowest real policy rate by far globally and this needs to be adjusted in preparation for second-round effects of price rises.

    • Separate from terms of trade overhang, there were a few comments consistent with the BOJ's role as inflation-fighter, forewarning that higher inflation will ultimately weigh on economic growth.

  • Trump says Iran ceasefire is on life support, reportedly weighing resumption of military strikes:

    • A day after he rejected Iran's offer, President Trump again derided proposal and said ceasefire is on life support (Bloomberg, Reuters). Path forward remains unclear with prospect of negotiated settlement undermined by still-large gaps between two sides on core issues of uranium enrichment and control of Strait of Hormuz. Iran's demands for war compensation also rankling US. Unclear how Trump intends to change Iran's calculus with regime hardliners digging in. Parliamentary speaker and Mohammad Bagher Ghalibaf said no alternative for US but to accept Iran's 14-point proposal.

    • Axios sources said Trump meeting with national security team Monday to discuss possible resumption of military action intended to force Iranian concessions on nuclear program. This may involve striking remaining 25% of targets US has identified but not yet struck (recall weekend press noted Israel pushing Trump to hit energy facilities). Trump also said he may revive expanded naval mission in Strait of Hormuz that goes beyond escorting ships.

    • Prolonged closure of Strait of Hormuz continues to drive debate about extent and duration of disruption to crude supply. Aramco said 100M barrels being lost every week Hormuz is closed, noting market currently being cushioned by inventory drawdowns that market observers say is not sustainable (Bloomberg). Noted even if Hormuz is reopened, it will take a while before tanker activity normalizes and Gulf producers bring output back online after shutting in wells during initial weeks of war. JP Morgan recently warned inventories could fall to 'operational stress' levels early June and 'operational minimum' in September if Hormuz is not reopened soon.

  • South Korean stocks swing lower as memory rally halts:

    • No specific catalyst for Tuesday pullback in South Korean equities. South Korea's presidential policy chief suggested a dividend to citizens funded by a tax on AI profits, drawing attention to public calls for greater sharing of windfalls from the AI boom (Bloomberg). Parallel to this, Samsung Electronics (005930.KS) remains locked in negotiations with labor unions demanding greater share of profits. Union has threatened to stage general strike from 21-May if demands are not met, raising concerns about disruption to production (Korea Times).

    • Profit-taking an easy excuse following preceding massive run-up that saw Kospi extend month-to-date gain to 20%. Index has continued to race ahead of strategist targets, though speed of the rally has raised concerns about near-term overheating. Technicals have moved further into overbought territory. Concentration risks evidenced by two memory giants now comprising almost 50% of index. Parabolic nature of the rally has also corresponded with pickup in hedging demand with Kospi volatility index rising to highest since early March.

  • Japan earnings highlights & themes:

    • Nikkei analysis showed 68% of about 150 manufacturers in the TSE Prime Market reported better profits in FY25. Main strengths were semis, defense and factory automation (FA). Aggregate net income rose 4% to JPY14.3T ($90.84B). Defense/aerospace buoyed by increasing government fiscal budget allocations to national economic security. Highlights included NEC (6701.JP) and Mitsubishi Electric (6503.JP). Notable FA leaders were Makino Milling Machine (6135.JP), Brother Industries (6448.JP), Fuji Electric (6504.JP). Semis notables HOYA (7741.JP), while upstream Ajinomoto (2802.JP) logged record net profit.

    • Autos highlighted as the main laggard. Toyota (7203.JP) logged JPY1.38T hit to operating earnings from US tariffs, leading net income down some 20%. Mitsubishi (7211.JP) NP dropped 76% amid US tariff drags. Prospects also looking grim for Honda (7267.JP) and Nissan (7211.JP) due to report over the next week, both likely net losses amid EV business overhaul and broader restructuring efforts.

    • Elsewhere, latest post-close tech results included Ibiden (4062.JP). FY guidance mostly in line, though net income was below FactSet consensus, though details were seen reaffirming tailwinds from AI server demand for IC package substrates (Nikkei).

    • In real estate, Tokyu Fudosan (3289.JP) FY guidance came in above FactSet consensus amid strength in condo growth. Keikyu (9006.JP) FY net income guidance slightly above FactSet consensus, buoyed by proceeds from property sales into a REIT fund. Announced JPY30B share buyback. JR Kyushu (9142.JP) FY metrics were better than expected, next FY guidance mixed amid impairments for the cancellation of a development project around Hakata station. Net profits still projected to hit a record for the first time in nine years.

  • Notable Gainers:

    • +8.6% 8591.JP (ORIX): reports Q4 results, stronger-than-expected FY guidance; to launch up to 100M-share buyback

    • +5.7% 4062.JP (IBIDEN): reports FY results; provides conservative guidance

    • +3.2% 018260.KS (SAMSUNG SDS CO.): Samsung SDS consortium selected as private-sector participant for South Korea's National AI Computing Center construction project

    • +2.0% 1024.HK (Kuaishou Technology): reportedly planning spin off Kling AI unit at potential $20B valuation

    • +1.8% 9688.HK (ZAI Lab): receives U.S. FDA Fast Track designation for Zocilurtatug Pelitecan (Zoci)

  • Notable Decliners:

    • -16.7% 5016.JP (JX Advanced Metals): reports FY results; to issue ¥125.00B convertible bonds; ENEOS to tender 57.3M JX Advanced Metals shares at ¥4,363/share

    • -6.4% 006800.KS (Mirae Asset Securities Co.): reports Q1 results

    • -5.8% 097950.KS (CJ CheilJedang): reports Q1 results

    • -1.1% 9434.JP (SoftBank Corp): reports Q4 results; provides mid-term management plan

• Data:

  • Economic:

    • Japan

      • March household spending (2.9%) y/y vs consensus (1.3%) and (1.8%) in prior month

        • Spending (1.3%) m/m vs consensus +0.6% and +1.5% in prior month

    • Australia

      • April NAB business confidence -24 vs -29 n March

        • Business conditions +3 vs +6 in March

  • Markets:

    • Nikkei: 324.69 or +0.52% to 62742.57

    • Hang Seng: (58.93) or (0.22%) to 26347.91

    • Shanghai Composite: (10.53) or (0.25%) to 4214.49

    • Shenzhen Composite: (18.39) or (0.63%) to 2903.98

    • ASX200: (31.10) or (0.36%) to 8670.70

    • KOSPI: (179.09) or (2.29%) to 7643.15

    • SENSEX: (993.92) or (1.31%) to 75021.36

  • Currencies:

    • $-¥: +0.29 or +0.18% to 157.5110

    • $-KRW: +13.57 or +0.92% to 1487.9900

    • A$-$: (0.00) or (0.50%) to 0.7213

    • $-INR: +0.32 or +0.33% to 95.7110

    • $-CNY: (0.00) or (0.01%) to 6.7942