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StreetAccount Summary - Asian Market Recap: Nikkei (1.99%), Hang Seng (1.62%), Shanghai Composite (1.02%) as of 04:10 ET

May 15 ,2026

• Synopsis:

  • Asia equities ended mostly lower Friday. The Kospi saw some steep declines after briefly touching 8K; Taiwan also fell but was a relative outperformer versus its rival. Japan's Nikkei 225 down sharply in the final hour of trading and underperformed the Topix. Declines for Australia's ASX, mainland China and for the Hang Seng that broke below 26K. Southeast Asia boards also down but relative outperformers, India slightly higher. US futures lower, Europe opened with some steep losses. US dollar rallying and placing more pressure on Asia currencies with the AUD and NZD noticeably lower. Treasury yields higher with 10Y at a one-year high, JGB yields higher, other Asia sovereign yields gaining. Crude futures higher with Brent above $107/bl; precious metals down very sharply, base metals including copper also under pressure. Cryptocurrencies lower.

  • Asia equities ended the week on a sour note as most major benchmarks saw losses. The biggest declines were in South Korea where the Kospi briefly touched 8K before falling sharply from record highs amid profit taking, and a steep decline at SEC that fell almost 9% after its major labor union said it would proceed with strike action. More broadly, inflation fears re-emerged amid another spike in crude oil from a lack of constructive newsflow over the reopening of the Strait of Hormuz, and comments from Trump that China wanted to buy US oil. This sent sovereign bond yields higher, including the 10Y JGB yield, which reached a 29-year high just as data showed April wholesale inflation rose by the most in three years. Economists said this paves the way for a BOJ rate hike as soon as next month.

  • In other developments, The Bank of Korea's newest board member said financial stability risks, including inflation tied to the middle east conflict and house prices, are South Korea's biggest economic risks. India hiked fuel prices for the first time in four years as retailers start to pass through the oil price surge. Malaysia raised its Q1 growth estimate despite 'growing external risks'. Japan April machine tool orders rose sharply and beat expectations. China credit data out late Wednesday showed an unexpected decline in household lending in April.

  • Private equity groups Bain and LY Corp sweetened their offer for Kakaku.com (2371.JP). Toyota Motor (7203.TT) said it would build a $2B Texas assembly facility as it looks to build out its US operations. Dongfeng Motor (600006.CH) and Stellantis signed a MoU to produce Jeep and Peugeot cars in China. Hon Hai (2317.TT) Q1 profits grew 19% to beat estimates on ongoing AI demand and stuck to its 'strong' growth forecast for the rest of the year. Hana Financial (087790.KS ) has bought a stake in South Korea's top crypto operator Dunamu from Kakao Investment (035720.KS). SMIC (981.HK ) reported a 5% growth in Q1 profits to $197.4M but missed analysts' estimates of $215.2M but it remained 'optimistic' for the full year. Gautam Adani has settled his SEC fraud case with a $6M payment and will end its investigation, according to Bloomberg (05SGBG-E).

• Digest:

  • Japan producer price inflation building notably driven by petroleum:

    • CGPI rose 4.9% y/y in April, well above consensus 3.0%. Follows revised 2.9% in the previous month, marking the highest since May-23. Sequential changes also accelerated to +2.3% m/m from +1.0% after a period of marginal fluctuations. Petrochemicals again the main driver (naphtha, oil, ethylene, propylene, xylene), along with plastics accounted for more than half the sequential increase. Year-on-year breakdown saw notable acceleration in chemicals as well as a sharp upturn in petroleum & coal. Food & beverages continued a trajectory in excess of 4% -- recall recent elevated press attention on shortages of components for food packaging and coloring ink. BOJ board member Masu yesterday cautioned widespread use of plastics today leaves global economy more sensitive to Middle East shocks than the 1973 oil crisis. Elsewhere, nonferrous metals prices the clear standout, rising well in double digits generally linked to rare earths and AI/tech demand. Attention also on terms of trade, which BOJ has cited as the primary conduit for Middle East impacts. Import prices accelerated sharply to +17.5% y/y from revised +8.0%, pointing to a deterioration in terms of trade. However, much of this offset by strength in export prices, ramping up with a one-month headstart, rising at a 18.9% pace in April after +12.2% in March. FX factor was marginal with average USD/JPY up only 0.4% y/y.

  • Bond markets under pressure:

    • Bond yield backup in focus with Treasuries, JGBs and Gilts under notable pressure this past week. Selling being attributed to combination of factors, including upside inflation risks from elevated crude prices, rising expectations of central bank rate hikes, and concerns about government debt.

    • Lack of diplomatic traction since President Trump rejected Tehran's 14-point plan underpinning concerns about prolonged closure of Strait of Hormuz. Stalemate accompanied by warnings that oil prices are being capped by unsustainable inventory drawdowns. Uncertainty keeping crude elevated with sell-side firms flagging upside risk to prices if Hormuz is not reopened soon.

    • Hotter-than-expected US CPI report saw market back to pricing in Fed rate hikes this year as Treasury 2Y yield hits highest in 12 months. Goldman Sachs delayed Fed rate cut expectations amid thoughts cost passthrough will see core PCE inflation closer to 3%.

    • JGB weakness pronounced in superlong sector with 20Y yield at 30-year high while 30Y and 40Y yields close to record highs. Reports cabinet mulling supplementary budget to shield economy from impacts of Iran conflict were denied by Finance Minister Katayama on Friday, though development renewed attention on Japan's fiscal trajectory. Market pricing in ~75% chance of BOJ rate hike in June after board member Masu called for rate hike as soon as possible if economic data holds up. Inflationary pressures underlined by Japan wholesale prices rising in April by most in three years.

    • Political turmoil in UK contributing to volatility in Gilt market with 30Y yield touching highest since 1998. Uncertainty surrounding PM Starmer's future and push by some Labour PMs for increased public spending spotlighting attention on UK's fiscal position, recalling memories of 2022 volatility in wake of former PM Truss' mini budget. BOE tightening bets have also firmed with chief economist Pill on Thursday backing prompt, modest rate hikes to combat inflation pressures.

  • Yen upside limited by importer dollar demand:

    • Nikkei discussed yen developments after recent FX intervention, noting strong market impressions that a level of 155 vs dollar appears to be a strong resistance level amid importer dollar demand. Persistent depreciation bias despite apparently multiple intervention operations affirms longstanding skepticism about any lasting impacts and perceptions were reinforced by strong dollar buying interest stemming from higher oil prices caused by Middle East conflict. Smaller speculative short yen positions compared to the prior intervention phase in 2024 offered relatively limited scope for a meaningful upswing from capitulation momentum. Diminished prospects for a near term US-Iran peace deal and oil prices above $100 augur for little change in sentiment. Also compounded by strong importer dollar buying interest with Resona indicating client orders were some 15 times larger than usual on 1-May and 7-May, on the days following yen rallies, indicating a propensity to buy dollars on any dip. Furthermore, article noted USD/JPY risk reversals (which reacted less than after the 'rate check' in January) and depressed implied vol still not signaling any impending breakout from the current range.

  • Hon Hai remains on AI ramp:

    • Hon Hai Precision (2317.TT) Q1 metrics came mostly in line with FactSet consensus, though beating other street estimates. Takeaways were broadly positive on the back of 19% y/y growth in net profit, 30% increase in revenue, and upbeat qualitative guidance. Nearly half of sales comprised of cloud computing related products. Management comments clarified they expect strong revenue growth this year driven by AI server demand. Consumer electronics relatively softer due to chip supply constraints. Signaled 30% capex growth with AI viewed as secular rather than short-term theme. Following similar growth over the past two years, much of that was spent building up AI servers in the US. CEO Chiang remained optimistic about FY performance despite possible impacts from geopolitical developments, supply chain adjustments and fluctuations in raw materials costs (Reuters). Expressed confidence that the contract manufacturing business model will shield against higher materials costs induced by war in Middle East (Nikkei). Server rack business expected to see high double-digit growth in Q2 with shipments more than doubling for the year. Also anticipates expansion in market share for next-gen AI servers, understood to be alluding to Nvidia (NVDA) Vera Rubin racks with a showcase set for the annual Computex expo in Taipei next month. Gross margin edged up to 6.18% from 6.11% a year earlier.

  • Strategists revise up Taiwan index targets amid earnings momentum:

    • Taiwan stock rally has stalled over the past week, leaving index up 9% month-to-date in contrast to Kospi's' 19% advance. Strategists remain bullish on Taiwan's index with JP Morgan raising its base case target to 47K (vs last 42,341) and bull case target to 50K. Comes after UBS recently raised its year-end target to 41,645 with an upside target of 46,603.

    • Primary upside driver remains expectations of continued strong earnings growth on the back of accelerating US hyperscaler capex. UBS noted Taiwan consensus earnings estimates for 2026 and 2027 were revised up 5% and 7% following April/May reporting season. Strategists acknowledged rich valuations with Taiwan's forward P/E of above 24x near highest since 2000, though justified by fundamentals with EPS seen growing ~30%.

    • Investor positioning remains light with EM long only funds underweight positions in Taiwan at 10-year high. Leveraged retail positions in high beta pockets have risen substantially since March but low margin balances relative to market cap seen providing scope for additional retail inflows. Retail investors have already driven significant rise in trade volumes lately, mainly through direct exposure and via ETFs.

    • Upcoming analyst meetings and Computex event in early June viewed as potential near-term catalysts amid interest surrounding company updates on development of next-gen platforms. At Thursday's tech symposium TSMC (2330.TT) said it anticipates global semiconductor market exceeding $1.5T by 2030 vs prior estimate $1T, with group to ramp up capacity for 2nm and A16 chips (projects CAGR 70% from 2026-2028) (Reuters).

  • Notable Gainers:

    • +23.2% 6965.JP (Hamamatsu Photonics KK): reports H1 results; earnings beat expectations driven by higher volumes across most segments

    • +7.2% 9684.JP (Square Enix Holdings): results beat FactSet estimates; FY guidance disappointed due to lost Final Fantasy licensing royalties

    • +4.1% 6856.JP (Horiba): reports Q1 revenue and operating profit ahead of FactSet estimates; raises FY guidance

    • +3.9% 2503.JP (Kirin): reports Q1 results; revenue largely in line with FactSet estimates, normalized operating profit ahead

    • +3.1% 2269.JP (Meiji): repots FY results; earnings beat on pharmaceuticals strength

    • +0.0% 071050.KS (Korea Investment Holdings Co.): reports Q1 results with operating profit ahead of FactSet estimates

  • Notable Decliners:

    • -15.1% 009830.KS (HANWHA SOLUTIONS): provides timeline for KRW1.814T rights offering

    • -11.0% 3659.JP (NEXON Co.): reports Q1 results; revenue misses FactSet estimates

    • -6.4% 020560.KS (Asiana Airlines): reports Q1 operating profit loss

    • -6.2% 402340.KS (SK Square Co.): reports Q1 results; revenue down (13%) y/y

    • -4.9% 005830.KS (DB Insurance Co.): reports Q1 results; standalone operating profit down (28%) y/y

    • -1.9% 2359.HK (WuXi AppTec): to issue CNY6.8M USD-settled zero-coupon convertible bonds due 2027

    • -1.7% 2099.HK (China Gold International Resources Corp.): reports Q1 net income $236.4M, +175% vs year-ago $86.0M

• Data:

  • Economic:

    • Japan April

      • CGPI +4.9% y/y vs consensus +3.0% and revised +2.9% in prior month

  • Markets:

    • Nikkei: (1,244.76) or (1.99%) to 61409.29

    • Hang Seng: (426.31) or (1.62%) to 25962.73

    • Shanghai Composite: (42.53) or (1.02%) to 4135.39

    • Shenzhen Composite: (25.53) or (0.88%) to 2861.46

    • ASX200: (9.90) or (0.11%) to 8630.80

    • KOSPI: (488.23) or (6.12%) to 7493.18

    • SENSEX: 298.89 or +0.40% to 75697.61

  • Currencies:

    • $-¥: +0.06 or +0.03% to 158.4410

    • $-KRW: +4.75 or +0.32% to 1498.3700

    • A$-$: (0.01) or (0.77%) to 0.7164

    • $-INR: +0.17 or +0.18% to 95.9366

    • $-CNY: +0.02 or +0.25% to 6.8024