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StreetAccount Summary - Asian Market Recap: Nikkei (0.97%), Hang Seng (1.11%), Shanghai Composite (0.09%) as of 04:10 ET

May 18 ,2026

• Synopsis:

  • Asia equities ended lower almost everywhere Monday. South Korea pared early steep declines and a trading halt to close slightly higher. Thailand was also marginally higher but elsewhere major benchmarks ended lower with steep declines in Hong Kong, mainland China, Australia and Japan's two main boards. India and Southeast Asia also fell with Indonesia's JSX down almost 4% following a two-day holiday. US futures lower, Europe lower in the opening hour. US dollar flat with the DXY index still hovering just above 99; yen, AUD and won weaker, rupee and rupiah at fresh record lows. Treasury yields higher across tenors with the 10Y at 16-month highs; JGB yields higher across tenors, other Asia sovereign yields higher ex China. Crude blends higher with Brent above $110/bl. Precious metals lower but well off their worst levels. Base metals lower. Cryptocurrencies down.

  • Asia equities continued their slide Monday amid another surge in Brent oil prices and sovereign bond yields globally with regional currencies also back under pressure. The moves came after both Washington and Tehran sent signals they were prepared to restart the war, and a UAE nuclear facility was targeted by a drone attack. President Trump said Iran needed to 'move fast' to find a deal while an Iranian military advisor said Iran's armed forces had 'fingers on their triggers'. A flare up in the Russia-Ukraine war also weighing on Brent crude which now trades at almost $111/bl, with WTI at around $107.

  • Analysts viewed the Xi-Trump summit that concluded on Friday as largely inconsequential with few trade deals of note announced aside from a modest boost to agriculture exports to China, while question marks remain over an arms sale to Taiwan. In regional developments today, China April activity data was poor as growth slowed in industrial output and retail sales, investment sharply declined, while a tick lower in unemployment was a bright spot. House prices also declined again. Thailand's economy grew by more than expected in Q1 as exports and government investment proved stronger than expected. Singapore's volatile non-oil exports reading for April accelerated sharply as shipments from pharma and electronics clusters surged.

  • Inpex (1605.JP) has entered a sales and purchase agreement to acquire PetroChina's (857.HK) 10.7% interest in their Browse joint venture. Mizuho Financial (8411.JP) confirmed media reports it is considering investing in Rakuten Bank (5838.JP). Nidec (6594.JP) is to exit its drive component joint venture with Guangzhou Auto, and its EV motor partnership with Stellantis. A South Korea court has granted Samsung Electronics (005930.KS) parts of an injunction request against strike action as management and its biggest labor union meet again.

• Digest:

  • China activity data broadly disappoint:

    • Industrial production rose 4.1% y/y in April, weaker than consensus 6.0%. Follows 5.7% in the previous month and marks the softest since Jul-23. Among notable categories, integrated circuits and robots logged sharp growth, while smartphones rose moderately. Contrasted with notable declines in passenger cars (18.8%) and solar cells (25.6%) while PCs fell by nearly double digits and steel logged small declines. NBS noted slim majority of products covered logged increases, underscoring very mixed picture.

    • Retail sales growth virtually stalled to 0.2% y/y also notably below consensus 1.9%. Follows 1.7% in the prior month, the weakest in the current growth streak going back to 2023. Autos sharply negative along with jewelry, home appliances, building materials and furniture, pointing to soft discretionary/housing related demand.

    • Fixed asset investment unexpectedly turned weaker, down 1.6% YTD vs expectations of steady 1.7% expansion. Infrastructure halved to 4.3% from 8.9%, manufacturing more than reversed an earlier pickup to 1.2% from 4.1%. Also coincided with a resumption of deterioration in real estate investment to a 13.7% contraction from prior 11.2%. Yet, details remain mixed; property sales declines virtually steady at 10.2% while nominal weakness narrowed moderately, and available financing continued to register steady deepening in contraction. New construction starts remained down by more than 20%.

    • Urban unemployment rate was the lone bright spot, declining to 4.2% vs consensus 4.3% from 4.4%.

  • G7 finance ministers to discuss bond volatility as yields surge:

    • Bond market selloff continues with Treasury 30Y yield climbing further above 5% to a 20-year high on Monday. Selloff more pronounced in JGB market with 30Y yield hitting highest since 1999 while 10Y and 20Y yields highest in 30 years. Concerns about Japan's fiscal trajectory in focus after PM Takaichi confirmed reports she is eyeing supplementary budget to cushion economy from Iran war impact (Bloomberg). Reuters sources said plan would be funded by issuance of new debt. Iran conflict uncertainty key part of the bearish narrative as rising crude prices fan inflation concerns with monetary policy expectations shifting in a more hawkish direction.

    • Developments feeding into concerns markets may be settling into a period of sustained higher interest rates (Bloomberg). Topic to be discussed by G7 Finance Ministers at their meetings 18-19-May according to Japan Finance Minister Katayama, who observed that recent volatility in Treasury, JGB and Gilt markets appeared self-reinforcing (Bloomberg). Prospects of coordinated action considered low with Treasury Secretary Bessent signaling lack of urgency by downplaying inflation pressures as transient.

    • Bond yield back driving discussion about implications for equities (Bloomberg, Reuters). While AI narrative remains decidedly bullish on the back of robust earnings growth and strong demand, rising bond yields are seen as a risk to growth/momentum names trading on lofty valuations. SOX forward P/E of more than 25x well above 10-year average of 19x, while S&P 500's P/E of 21.3x also compared to long-term 16x. Narrow breadth and extreme concentration (handful of big tech stocks driving bulk of gains in US, Taiwan and South Korea) adding to concerns about risk to equity markets from volatility in bonds.

  • Trump-Xi summit yields some deliverables, yet meaningful progress debatable:

    • White House fact sheet led with an agreement US-China should build a constructive relationship of strategic stability on the basis of fairness and reciprocity. President Trump will welcome Xi for a visit to Washington this fall.

    • On geopolitics, key agreements between Trump and Xi that Iran cannot have a nuclear weapon, called for the reopening of the Strait of Hormuz and no country of organization can be allowed to charge tolls. Share goal to denuclearize North Korea.

    • Several developments in economic relations:

      • Confirmed establishment of US-China Boards of Trade and Investment

      • China to address US concerns related to rare earths

      • China pledged initial purchase of 200 Boeing (BA) aircraft

      • China to purchase at least $17B per year of US ag products over the next three years, in addition to the soybean purchases commitments in Oct-25

      • China restored market access for US beef, resumed imports of poultry from US screened for avian flu

    • Not mentioned in official rhetoric from either side was Taiwan. Trump told reporters on Air Force One that he and Xi had extensive discussions and Trump would soon make a decision on the matter (Reuters). Recall Xi's stern warning to US gained notable press traction last week. Trump added he did not believe there was conflict over the issue and made no commitments to Xi.

    • Reuters discussed takeaways that results broadly underwhelmed, leaving an effective stalemate in place, while China came out ahead. A source said China pushed for a longer extension of the tariff truce than Trump administration was willing to give, as well as assurances ahead of pending Section 301 investigations. Neither side put much on the table for the summit, though some deals could be saved for Xi's visit to Washington in the fall.

    • China press focused mainly on the significance of the strategic stability phrase as a major advancement in relations and praise was of the order of a bilateral reset (Xinhua). Commerce Ministry signaled Board of Trade will discuss tariff reductions based on an agreement in principle for reciprocal levy cuts as well as working to resolve non-tariff barriers (Xinhua). Details yet to be worked out though pledged to finalize at an early date. However, Trump said tariffs weren't discussed (Bloomberg).

  • Japan stimulus talk evolves substantially, new debt issuance eyed for FY26 extra budget:

    • Reuters, citing a source, reported the government is likely to issue fresh debt as part of ‌funding for a planned extra budget to cushion the economic blow from the Middle East war. Prime Minister Takaichi said she had told Finance Minister Katayama last week to start working on a supplementary budget, and about face from previous remarks ruling out the notion. DPP leader Yuichiro Tamaki called for a size of about ¥3T ($18.9B), which offers a starting point for future debate. Article was confirmed to have accelerated renewed concerns about fiscal expansion, triggering the selloff in superlong JGBs Monday.

    • In a weekend article, Nikkei fleshed out substantive developments to indicating an FY26 extra budget discussions have begun in earnest, focused mainly on energy relief. Decision to be made within the month and a supplementary budget bill typically takes around two months to be formulated.

    • Not a major surprise given Takaichi told an upper house committee meeting on 11-May that she had instructed her government to examine a number of ideas ahead of the Golden Week holiday.

    • Furthermore, press had for some time flagged existing initiatives such as the restart of gasoline subsidies draw on FY25 reserves that are sure to run out -- as early as June in the case for gasoline subsidies. Protracted Middle East tensions warrant extra funding as this program alone requires several hundred billion yen per month.

    • Another round of electricity & gas subsidies expected to be implemented over July to September to offset fuel price increases which will be effective over peak summer energy demand. Prior rounds cost JPY529.6B in Q1 and JPY288.0B in 3Q25.

    • The FY26 general budget topped up disaster reserves by another JPY1T, though this is also meant to cover earthquake and flood damages, which means the entire amount cannot be used for energy relief alone.

  • Trump says Iran running out of time to make deal:

    • US-Iran headlines leaning hawkish after President Trump said time is of the essence and urged Tehran to make deal. Told Axios he believes Iran wants a deal and is waiting for them to provide updated proposal, threatening to resume bombing otherwise. Israel's Channel 12 cited senior official who said country preparing for imminent resumption of war that may go for days or weeks. Trump expected to convene national security meeting Tuesday to discuss military options. Middle East tensions notched higher on weekend with UAE and Saudi Arabia reporting drone incidents (Reuters). UAE said one strike damaged nuclear plant while Saudis said three drones intercepted.

    • Some distance remains between US and Iran, clouding prospects of a negotiated settlement (Bloomberg). Iranian media noted US set five conditions for deal, including no war compensation, giving up HEU stockpiles to US, being allowed only one operational nuclear facility, unfreezing less than quarter of Iranian assets and conditioning ceasefire on progress on negotiations. Underlined contrast to Iran's red lines of lifting sanctions, unfreezing assets, payment of war compensation, and recognition of its control over Strait of Hormuz.

    • Diplomatic stalemate, risk of renewed hostilities and Iranian threats against Middle East energy facilities underpinning continued rise in crude prices. There has been pickup in warnings about an unsustainable drawdown in global crude inventories that is capping upside in prices. UBS noted global inventories will near record lows by end-May if no change in demand and IEA said shrinking buffers risk surge in prices (CNBC). Still no line of sight towards reopening of Strait of Hormuz with Iran showing no signs of relinquishing its self-declared control over Strait of Hormuz (Bloomberg).

  • Notable Gainers:

    • +18.6% 4543.JP (Terumo): reports FY results; net income beats FactSet estimates

    • +16.6% 6098.JP (Recruit): reports Q4 results; headline figures, guidance ahead of StreetAccount estimates

    • +10% 5838.JP (Rakuten Bank): reports Q4 results; Mizuho Financial confirms considering investing in Rakuten Bank

    • +2.3% 8306.JP (Mitsubishi UFJ Financial): reports FY results; to launch up-to-¥100.00B buyback

    • +0.3% 1605.JP (INPEX Corp): enters sales and purchase agreement to acquire PetroChina's 10.67% participating interest in Browse JV; terms undisclosed

  • Notable Decliners:

    • -21.5% 001040.KS (CJ Corp): reports Q1 results; operating profit misses FactSet estimates

    • -11.2% 7181.JP (JAPAN POST INSURANCE): reports FY results with ordinary income below Factset estimates; forms medium-term management plan

    • -7.8% 9863.HK (Zhejiang Leapmotor Technology): reports Q1 results; Q1 net income attributable (CNY390M) vs year-ago (CNY130M)

    • -6.2% 4523.JP (Eisai): reports Q4 results; operating income misses FactSet estimates

    • -5.6% 8411.JP (Mizuho Financial): reports FY results; Mizuho Bank to sell 15.0% stake in Orient to Muninova; confirms considering investing in Rakuten Bank

    • -2.3% BN4.SP (Keppel): IMDA suspends review of Tuas's acquisition of M1

    • -1.8% 6594.JP (Nidec): reportedly to exit EV drive component JV with Guangzhao Automobile Group in move away from expansion strategy

• Data:

  • Economic:

    • China April

      • Industrial production +4.1% y/y vs consensus +6.0% and +5.7% in prior month

        • Retail sales +0.2% y/y vs consensus +1.9% and +1.7% in prior month

        • Fixed asset investment (YTD) (1.6%) y/y vs consensus +1.7% and +1.7% in prior month

        • Unemployment rate 5.2% vs consensus 5.3% and 5.4% in prior month

      • New house prices (0.1%) m/m vs (0.2%) in prior month (April)

        • House prices (3.5%) y/y vs (3.4%) in prior month

    • Japan March

      • Retail sales y/y +1.4% versus +1.7% in prior month

    • Singapore April

      • Non-oil domestic exports y/y +24.5% versus +15.3% in prior month

  • Markets:

    • Nikkei: (593.34) or (0.97%) to 60815.95

    • Hang Seng: (287.55) or (1.11%) to 25675.18

    • Shanghai Composite: (3.86) or (0.09%) to 4131.53

    • Shenzhen Composite: 0.97 or +0.03% to 2862.44

    • ASX200: (125.50) or (1.45%) to 8505.30

    • KOSPI: 22.86 or +0.31% to 7516.04

    • SENSEX: 12.20 or +0.02% to 75250.19

  • Currencies:

    • $-¥: +0.15 or +0.09% to 158.9130

    • $-KRW: (1.63) or (0.11%) to 1496.2400

    • A$-$: (0.00) or (0.11%) to 0.7146

    • $-INR: +0.32 or +0.33% to 96.2794

    • $-CNY: (0.01) or (0.09%) to 6.8038