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StreetAccount Summary - Asian Market Recap: Nikkei +0.13%, Hang Seng (1.40%), Shanghai Composite (0.11%) as of 04:10 ET

Jun 16 ,2026

• Synopsis:

  • Asia's equity rally stalled out Tuesday despite another bright open. Nikkei's 225 hit a fresh record early on before ending just a few points higher while the Topix lost a little ground. Greater China was mixed with Shenzhen higher, but Shanghai fell a little and the Hang Seng ended sharply lower. Australia's ASX was flat, the Kospi and Taiex held on to gains, India is higher. Indonesia and Thailand were closed for a holiday. US futures mixed, Europe opened with modest gains. US dollar flat, yen unchanged post BOJ decision, other Asia currencies slightly weaker. Treasuries mixed, JGB yields higher across tenors. Precious metals slightly higher, base metals fell. Crude futures down again with Brent at $82/bl. Cryptocurrencies lower.

  • Asia's equity rally on Monday rather petering out today as markets became more quizzical over the Gulf ceasefire plan with full details yet to emerge, and the US and EU disagreeing over the Hormuz reopening timetable. Investors also returned to the humdrum of economic data and central bank decisions Tuesday. China May economic activity data disappointed with retail sales contracting for the first time since the pandemic, investment plunging and house prices falling at an accelerated pace; on the positive side, industrial output improved to match earlier export data and unemployment ticked lower.

  • The Bank of Japan raised its policy rate 25bps to 1.0% as fully expected and leaked to the press a few hours before the formal announcement . The bank said energy price increases were flowing through to business costs at a rapid pace and would likely soon reach consumers and keep pressure on inflation, signaling the potential for further rate hikes. Separately, the bank said it would reduce its monthly bond purchases by ¥200B per quarter from next April. The RBA left is OCR unchanged as expected but warned rate hikes may not be over in its fight against inflation and despite admitting the economy was slowing. Elsewhere, South Korea May import prices fell m/m but rose 24.8% y/y while export prices rose 0.3% m/m, 46.9% y/y.

  • Mitsui OSK (9104.JP) warned the US-Iran deal must be 'material' for Strait of Hormuz to reopen, according to a FT report. DeepSeek (+DEEPSEEK) raised more than CNY50B ($7.4B) in its latest funding round, according to TheInformation. Xiaohongshu Tech (1315WF-E) is preparing for a Hong Kong listing by the end of June which could be one of the biggest IPOs in several years. SoftBank's (9984.JP) Vision Fund CFO is to leave the company after more than a decade.

• Digest:

  • BOJ hikes as expected, ends scheduled JGB purchase reductions from April next year:

    • As widely expected, BOJ raised the uncollateralized OCR by 25 bp to 1.00%. Vote count was 8-1; the lone dissenter was Asada who argued downside risks to production and employment were greater than upside risks to inflation.

    • Economic assessment in the policy statement acknowledged Middle East headwinds, though drags from higher oil prices offset by high corporate profits and improvements in employment and incomes. Risk of significant economic slowdown seems to have decreased, mainly owing to government support measures and progress in securing alternative supply chains to substitute for the Middle East. In contrast, permeation of inflation pressures moving more quickly, pointing to the risk of underlying inflation overshooting the 2% target. Also mentioned financial conditions have been accommodative and real rates negative.

    • Guidance reaffirmed rate hikes will continue in response to economic and financial developments. Noted they will consider the timing and pace of adjustments while closely monitoring Middle East effects, though language was little changed otherwise.

    • Decision on JGB purchases only confirmed no interim changes will be made through March 2027 which will leave monthly purchase at about JPY2T from April. Statement made no specific mention of the future course of tapering, though signifying an end to scheduled cutbacks. Reiterated the bank will respond nimbly if long yields rise rapidly. Added there will be no more interim assessments and revisions can be decided at MPMs if deemed necessary.

    • Deputy Governor Uchida's remarks at the press conference kept close to the points made in the policy statement (Nikkei, Reuters). Avoided commenting directly on the future pace of rate hikes. Downplayed the usefulness of neutral rates given the wide range of estimates. Yet, offered some reassurance that board members will conduct policy to avoid falling behind the curve.

  • China activity data mixed, reinforces divergence between supply and demand:

    • Industrial production rose 4.5% y/y in May, above consensus 4.3%, following 4.1% in the previous month. Main bright spots were integrated circuits, NEVs and robots, contrasting with sharp drops in broader passenger cars, PCs and solar cells. Smartphones also declined, as well as broad intermediate goods (building materials, iron & steel).

    • In contrast, demand side indicators were mostly softer -- Retail sales fell 0.6%, below expectations for a 0.2% decrease. Follows 0.2% growth in the prior month. Bloomberg consensus portended the first slide into negative territory since the Covid re-opening phase in late 2022. Catering service growth dwindled to 0.6%. Dominant theme was the weakness in discretionary spending categories -- autos, home appliances and building materials -- all down by double digits. Generally consistent with weakness in car association sales data and widely discussed roll-off of EV incentives as well as lack of incremental impetus from consumer goods trade-in subsidies which were only maintained this year. Gold & jewelry, sports & leisure products, furniture also lower.

    • Fixed asset investment notably weakened to a 4.1% y/y contraction YTD from 1.6%, well below expectations of a 2.3% slide. Infrastructure growth continued to diminish rapidly, posting 0.6% from 4.3%, which was half the growth in the prior month. Manufacturing swung to a 0.4% contraction from 1.2% growth. Real estate declines deepened to 16.2% from 13.7%, back towards the low point of 17.2% at the end of last year. Headline continues to largely trace the downtrend in available financing. Sales by floor space fell at a largely steady pace while narrowing declines in nominal terms. New construction starts still down by more than 20%, offices tumbled 35.0%.

    • Urban unemployment rate edged lower to 5.1% in May from 5.2% in the previous month.

    • NBS assessment repeated complexities from external volatility while also recognizing the contrast between domestic supply and demand. Noted some companies facing significant pressures, requiring further support including the phrase 'counter-cyclical and cross cyclical adjustments.'

  • RBA on hold as expected, prepared to raise interest rates further if required:

    • RBA left cash rate unchanged at 4.35% as expected in a unanimous vote. Statement repeated policy well placed as board assesses response to previous rate hikes. RBA Governor Bullock said board did not consider hiking interest rates but is prepared to tighten further if inflation does not come down. Decision elicited dovish market reaction with policy sensitive 3Y yield erasing earlier gain, Aussie dollar declining and futures paring odds of another rate hike by year-end.

    • Language on economy little more dovish with RBA noting weakness in consumer spending and housing market, and higher-than-expected unemployment rate. Financial conditions have tightened following three straight rate hikes. Bullock doesn't expect economy to contract in Q2, but slower growth in demand needed to bring down inflation amid capacity constraints.

    • Flow of data since May is broadly consistent with RBA's expectations but board still thinks risks to inflation are to the upside. Latest data showed inflation still too high and board remains focused on ensuring it does not become embedded once impulse from higher oil prices has passed through. Noted signs some firms with cost pressures are raising their prices.

    • Bullock welcomed tentative US-Iran deal but said normalization will take time. This will leave upside risks to inflation and downside risks to growth with prolonged global supply issues to keep upward pressure on global energy prices. Statement noted plausible scenarios where inflation is higher and activity lower than envisaged in May.

  • Aspects of US-Iran deal invite skepticism:

    • Markets welcomed US-Iran agreement to end conflict and reopen Strait of Hormuz even as deal left open many questions and invited skepticism about implementation. Axios sources said CIA Director Ratcliffe told Trump US intelligence raises doubts about Iran's willingness to make nuclear concessions. Discussions between Iranian officials inconsistent with what they were telling mediators and US, feeding skepticism that Iran will sign a deal on US terms. However, VP Vance insisted nuclear inspectors will return to Iran as part of deal, and that US will participate in destruction of enriched uranium stockpiles (NBC News).

    • Future of Strait of Hormuz remains unclear after sources told Axios MoU includes toll-free passage for 60 days with Iran and Oman to discuss future management of the Strait. Trump said shipping will resume without tolls while Iranian media noted possibility of charging transit fees after 60-day period. European officials doubtful about Trump's claim shipping will resume by Friday and there is uncertainty surrounding plans for international coalition to facilitate transit and clear mines (Bloomberg).

    • Press also highlighted Israeli unhappiness with agreement that preserves Iran's governing structure against pre-war aim of toppling regime (Washington Post, link). Officials concerned deal provides Tehran financial lifeline to rebuild its military capabilities without committing to turning over enriched uranium. While agreement covers end to fighting in Lebanon, Israel has vowed to continue its campaign against Hezbollah.

    • There are discrepancies on sanctions relief. US officials insisting any sanctions relief will be contingent on Iran meeting its promises. Iranian media mentioning agreement allowing access to $24B in frozen assets with $12B given before 60-day period. Vance said $300B economic reconstruction fund could be accessible to Iran if they honor their commitments (CBS News), though Trump later derided as fake news claim that US is paying Iran $300B.

  • AI boom taking away appeal of other active themes:

    • Nikkei discussed struggles in Japanese active fund performance based on themes outside of AI/semis. Cited thoughts that value plays such as in autos and construction can't compete with tech, where sheer strength is setting the bar too high. Cited S&P Dow Jones aggregates of funds based on Japan blue chips showed about half outperformed S&P Topix 150 over the past year, while 70% underperformed over three years, reaching a high of ~80% over 10 years. Top 25 percentile group has almost entirely shifted, such that only 1% of names in the 2016-20 period remained in 2021-25. General implication was that outperformers are largely based on AI/semis. Year to date, proportion of Topix constituent outperformers are below 30%, leaving a narrow selection base for stock pickers. Active strategies gaining attention as the segment is starting to attract more inflows amid divided views on how long the AI-driven bull market will last.

    • Reuters highlighted top performing Asia funds with some delivering returns in excess of 100% in Jan-May based on AI hardware and LLM leaders. Market participants say regional funds closer to the ground were quicker to spot supply-side constraints and adapted their positions accordingly. Story featured examples such as WT Asset Management's long-short China Focus fund, which rose more than 20% in May alone, taking YTD net returns of 103%. WT said to boast assets under management of around $10B. E20 Capital posted a net gain of 136% with positions in memory, optics and CPUs boosting its flagship $2B Global Opportunity Investment Fund.

  • Notable Gainers:

    • +4.8% 4506.JP (Sumitomo Pharma): Reports 'encouraging' new clinical and translational research presented at European Hematology Association

  • Notable Decliners:

    • -1.3% 4502.JP (Takeda Pharmaceutical): Presents secondary and exploratory endpoint results for oveporexton in narcolepsy type 1

• Data:

  • Economic:

    • China May

      • Industrial production +4.5% y/y vs consensus +4.3% and +4.1% in prior month

        • Retail sales (0.6%) y/y vs consensus (0.2%) and +0.2% in prior month

        • Fixed asset investment (YTD) (4.1%) y/y vs consensus (2.3%) and (1.6%) in prior month

        • Unemployment rate 5.1% vs consensus 5.3% and 5.2% in prior month

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

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

  • Markets:

    • Nikkei: 87.00 or +0.13% to 69404.50

    • Hang Seng: (348.72) or (1.40%) to 24493.95

    • Shanghai Composite: (4.58) or (0.11%) to 4091.89

    • Shenzhen Composite: 28.44 or +1.02% to 2817.80

    • ASX200: 3.70 or +0.04% to 8917.70

    • KOSPI: 180.62 or +2.11% to 8726.60

    • SENSEX: 439.52 or +0.58% to 76703.85

  • Currencies:

    • $-¥: (0.09) or (0.05%) to 160.2550

    • $-KRW: (5.28) or (0.35%) to 1508.3240

    • A$-$: (0.00) or (0.27%) to 0.7055

    • $-INR: (0.00) or (0.00%) to 94.5010

    • $-CNY: (0.01) or (0.18%) to 6.7579