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StreetAccount Summary - Asian Market Recap: Nikkei +2.53%, Hang Seng +0.70%, Shanghai Composite (0.73%) as of 04:10 ET

May 29 ,2026

• Synopsis:

  • Asia equities ended higher almost everywhere Friday to take the regional MSCI benchmark to a record high. The strongest gains were again in South Korea and Taiwan, while the Nikkei also outperformed over the Topix. The Hang Seng gained some but closed off its high; mainland bourses were slightly lower. Australia led higher by miners. Southeast Asia and India benchmarks higher. US futures higher, European markets opened with more gains. US dollar flat, NZD stronger for a second day, little movement of note elsewhere. Treasury yields higher at the short end, lower at the long end; JGB yields mostly lower. Crude prices lower with Brent below $93bl, WTI below $89/bl. Precious metals consolidated overnight moves higher. Base metals mixed.

  • Sentiment improved materially overnight on reports Iran and the US have reached a MoU to extend their ceasefire by 60 days, reopen the Strait of Hormuz, and start fresh on negotiations over nuclear issues. Iran will also clear the strait of mines within 30 days and the US will lift its blockade. Tehran has not yet endorsed the plan while President Trump is yet to give his approval however geopolitical strategists said this is probably the best route out of the war for both sides for now, and would likely be approved. For the week, the region's markets were higher led by South Korea, Taiwan and Japan tech stocks while Hong Kong fell slightly and mainland China gained. For the month, the same pattern prevailed with tech-leaning benchmarks materially outperforming those exposed to high oil prices and unprotected inflation.

  • In regional developments Friday, Tokyo inflation unexpectedly fell to a four-year low on government subsidies, potentially mudding the path for a BOJ rate hike. Japan April industrial production and retail sales expanded unexpectedly while unemployment ticked lower. South Korea April industrial production, retail sales and investment all fell m/m but the finance ministry said it expects a rebound in May. Two RBNZ board members hinted strongly at rate hikes if medium-term inflation rises while New Zealand business confidence rebounded in May.

  • LG Electronics (066570.KS) stock up sharply on speculation Nvidia CEO Huang to meet LG Group chairman early next month to discuss physical AI. Samsung Electronics (005930.KS) has begun shipping samples of HBM4E memory chips to customers. Xpeng (9868.HK) revenue guidance underwhelmed amid sluggish vehicle deliveries. Foxconn (2317.TT) chairman struck optimistic tone about H2 and future growth momentum, underpinned by strong AI demand. Nikon (7731.JP) said it wants to rival ASML with low-priced chipmaking equipment. Mitsui & Co (8031.JP) is looking to invest in LNG projects to tap data center power demand, according to its chief executive. Xpeng (9868.HK) has projected its quarterly revenue will miss estimates on poor EV demand. The EU warned that JD.com's (9618.HK) $2.5B bid for Germany's Ceconomy may involve state subsidies

• Digest:

  • US, Iran said to have reached agreement on MOU, Trump yet to sign off:

    • Multiple US outlets reported US and Iran have reached agreement on MoU that will extend ceasefire by 60 days, in-line with earlier press leaks (Bloomberg, link, Reuters). According to Axios, Iran to clear mines within 30-days upon signing, and allow free and unfettered transit through Strait of Hormuz with US lifting blockade in turn. Iran to receive partial relief from oil sanctions with further sanctions relief discussed in next round of talks.

    • MoU stipulates Iran commits not to pursue nuclear weapons though details on uranium enrichment and fate of existing stockpiles will be negotiated during 60-day period. US officials claim Iran gave verbal commitments about their willingness to make nuclear concessions. MoU also includes end to war in Lebanon, promotion of regional peace, and mechanism allowing Iran to receive humanitarian aid.

    • No official confirmation from Iran yet though US officials told Axios Iranian negotiators said they had necessary approvals to sign. VP Vance noted deal is close with few sticking points remaining over language of text. Vance said hard to say if or when Trump will green light deal with US official adding he wants few days to deliberate. Treasury Secretary Bessent reiterated ending nuclear program and turning over stockpiles remain red lines.

    • Also unclear whether two sides reached common ground on Strait of Hormuz amid Iranian insistence it will manage the waterway with fee collection. Bessent said Oman assured US it did not plan to charge tolls, which follows recent reports Iran in talks with Oman about shared management. Trump also threatened to attack Oman if it supported charging tolls. Tensions along Strait remain elevated after US military struck Iranian drones targeting ships this week.

  • Tokyo core inflation softens further amid ongoing policy effects, upside pressures still loom:

    • Tokyo core CPI rose 1.3% y/y in May, below consensus and prior month's 1.5%, lowest since Mar-22. Ex-fresh food & energy inflation moderated to 1.6%, also softer than consensus 1.8%, following 1.9% in the previous month and lowest since Aug-22.

    • Energy contributions were little changed. Electricity & gas subsidies have rolled off, though another round now set for Jul-Sep. Fuel subsidies remained a constant drag of 0.24 ppt, largely reflecting the gasoline price cap.

    • Non-fresh food inflation continued to ease as rice prices turned negative for the first time since Aug-22. For the Tokyo area, base effect headwinds have reached a peak and will dissipate going forward.

    • Yet, broader price hikes continue. Teikoku Databank survey of 195 companies showed 2,269 food & beverage products slated for increases in July, more than double the previous month and the highest since April (Nikkei). As to the drivers, 97.7% cited higher raw materials costs, while 73.7% pointed to packaging materials. Thinktank notes 2026 is set to see the total number of items subject to price increases exceeding 10K for an unprecedented fifth straight year.

    • In the CPI data, biggest single factor came in a sharp drop in water utilities, down 34.6% for a drag of 0.23 ppt. Tokyo government implemented a second round of free rates from May to August.

    • For nationwide implications, recall recent attention on an FY26 supplementary budget bill set to be of some JPY3T ($19B) in size mainly to replenish reserves to sustain fuel subsidies and also fund the next round of electricity & gas subsidies. While this will continue to suppress headline inflation, consensus forecasts look for momentum to pick up again each quarter in FY26 stemming from higher crude oil prices. Broader supply chain bottlenecks skew risks to the upside.

  • China and EU trade tensions heating up:

    • Ahead of EU's special meeting on China on Friday, CCTV-affiliated account Yuyuantantian warned China will "definitely take countermeasures" if Brussels would impose quotas or additional tariffs in a proposal from five members to develop so-called "resilience tool" amid "unfair Chinese competition". Article quoted people with knowledge saying China could launch anti-discrimination investigations and supply chain security investigations into relevant practices by EU. It explicitly said China is "neither unfamiliar with nor afraid of trade frictions and is prepared to fight till the very end", similar language was used when Beijing hardened its posture after Trump's Liberation Day tariffs in Apr-25. Message also corroborated with earlier FT report about Beijing's intention to retaliate. Meanwhile EU's industry commissioner Stéphane Séjourné told FT that the bloc would deploy import quotas and tariffs "more systematically, use safeguard clauses in more general manner on sectors and not just on businesses or particular raw material" as Brussels sees existential threat from Chinese imports.

  • Japan data generally better than expected:

    • Industrial production rose 0.8% m/m in April, contrasting with expectations of a 0.6% decline. Follows 0.4% slide in the previous month, marking the first rebound in three months. IT equipment among the main drivers, tech components & devices moderately positive. Autos were a notable drag. Amid attention on Middle East effects, petroleum & coal products fell notably, though plastics only edged lower.

    • Aggregate shipments were somewhat stronger, leaving inventories marginally lower. However, this follows a sharper decrease in the prior month and April marks a lower start to Q2 on the heels of two straight quarterly declines. Core capital goods shipments bounced sharply from recent weakness, for a solid start to Q2, reinforcing positive narrative surrounding capital spending.

    • Going forward, METI survey projections point to a 5.1% increase in May and a 0.4% dip in June. At face value, this sets Q2 on course for a pickup over Q1. However, adjusted May projection came in at 2.1% which would see quarterly momentum soften while remaining positive. Production machinery and petroleum & coal the standouts projecting double-digit growth in May. Transportation equipment and tech parts & devices also bullish, IT among the laggards.

    • Retail sales rose 1.3% m/m in April, beating consensus 0.4%. Follows 1.0% in the prior month, marking back-to-back growth and the third in four months. Sequential growth clearly led by autos. Appliances and apparel also positive. Fuel notably declined, food & beverages edged lower. Consumption narrative unlikely to change much until wage growth, particularly real earnings, picks up meaningfully. Inbound tourism traffic fluctuating this year as the Middle East conflict emerged as the latest headwind, adding to an ongoing plunge in China visitors.

    • Unemployment rate was 2.5% in April, lower than consensus and prior month's 2.7%. Big jump in sequential employment was entirely driven by regular jobs and outpaced a similar rebound in the labor force. Job offers to applicants ratio was steady at 1.18, matching expectations. Notably, sequential offers logged the first rise since Oct-24, offsetting an increase in applications. Yet, actual job placements fell sharply, underling a broader downtrend. Still, all the attention remains squarely on historic labor shortages as indicated by the BOJ Tankan survey.

  • South Korea April industrial output, retail sales and investment all decline:

    • South Korea's monthly activity data for April contracted m/m amid economic uncertainties stemming from middle east conflict, and despite 2.4% y/y increase (StatisticsMinistry). Industrial production contracted 0.6% m/m with a 3.1% expansion in chip making not enough to offset declines 0.7% in mining and manufacturing, and 19.4% decline in oil refining. Service output contracted 1%, dragged lower by 7.7% decline in finance and insurance. Retail sales contracted 3.6% m/m, biggest monthly decline since Covid era; increased 1.6% y/y. Facility investment slid 3.6% m/m (up 8.1% y/y) as aviation spending slowed, offset by growth in machinery that includes chipmaking. Finance ministry said it expects figures to rebound in May as consumer sentiment recovered while business sentiment reached 43-month high (Yonhap). Separate data from BOK Friday showed South Korea non-tech exports to the US declined 12.8% from Q2-25 to Q126 due to tariffs although market share for those goods was steady (Yonhap).

  • Notable Gainers:

    • +29.9% 066570.KS (LG Electronics): on speculation of Nvidia's Huang meeting with LG Corp's chairman Koo in upcoming visit to South Korea

    • +11.4% 1801.HK (Innovent Biologics): enters into collaboration with Pfizer to accelerate development of oncology medicines

    • +5.1% 2593.JP (ITO EN): raises FY guidance; guides FY net income attributable ¥3.40B vs prior guidance ¥1.00B

    • +4.9% 5929.JP (Sanwa Holdings): activist ValueAct raises stake to 7.54% from 5.94%

    • +3.3% 179.HK (Johnson Electric Holdings): reports FY adjusted EBITA $287.4M vs FactSet $286.4M

    • +3.0% J36.SP (Jardine Matheson Holdings): reportedly exploring sale of additional assets

    • +2.8% 8604.JP (Nomura Holdings): revises 2030 pretax income target to over ¥750B from over ¥500B

    • +0.4% 7203.JP (Toyota Motor): reportedly to pull the plug on next-gen Lexus EV model

  • Notable Decliners:

    • -8.5% 7211.JP (Mitsubishi Motors): forms mid-to long-term plan

    • -3.8% 9868.HK (XPeng, Inc.): reports Q1 non-GAAP EPADS (CNY1.76) vs FactSet (CNY1.12)

    • -3.1% 2678.JP (ASKUL Corp): reports May non-consolidated net sales ¥28.09B, (10.5%) y/y

    • -1.7% 6770.JP (Alps Alpine): revises mid-term management plan; guides FY27 net income attributable ¥43.0B vs prior guidance ¥40.0-45.0B

• Data:

  • Economic:

    • Japan

      • May Tokyo core CPI +1.3% y/y vs consensus +1.5% and +1.5% in prior month

        • CPI excl. fresh food & energy +1.6% y/y vs consensus +1.8% and +1.9% in prior month

        • Overall CPI +1.4% y/y vs consensus +1.6% and +1.5% in prior month

      • April industrial production +0.8% m/m vs consensus (0.6%) and (0.4%) in prior month

        • METI survey projections +5.1% in May, (0.4%) in June

      • April retail sales +2.1% y/y vs consensus +1.3% and revised +1.4% in prior month

        • Retail sales +1.3% m/m vs consensus +0.4% and revised +1.0% in prior month

      • April unemployment rate 2.5% vs consensus 2.7% and 2.7% in prior month

        • Job offers to applicants ratio 1.18 vs consensus 1.18 vs revised 1.18 in prior month

    • New Zealand

      • May ANZ Business Confidence +10.0 vs (10.6) April

    • South Korea

      • April industrial production (0.7) m/m vs Factset consensus +0.3% and revised +0.6% in prior month

        • Industrial production +1.5% y/y vs Factset consensus +2.3% and revised +3.9% in prior month

  • Markets:

    • Nikkei: 1,636.38 or +2.53% to 66329.50

    • Hang Seng: 176.23 or +0.70% to 25182.39

    • Shanghai Composite: (30.07) or (0.73%) to 4068.57

    • Shenzhen Composite: (54.26) or (1.90%) to 2805.62

    • ASX200: 138.80 or +1.62% to 8731.70

    • KOSPI: 290.86 or +3.55% to 8476.15

    • SENSEX: (329.30) or (0.43%) to 75538.49

  • Currencies:

    • $-¥: (0.03) or (0.02%) to 159.2170

    • $-KRW: +11.62 or +0.78% to 1508.0500

    • A$-$: (0.00) or (0.14%) to 0.7154

    • $-INR: (0.52) or (0.55%) to 95.3129

    • $-CNY: (0.01) or (0.13%) to 6.7710