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StreetAccount Summary - Asian Market Recap: Nikkei +0.59%, Kospi (2.04%), Shanghai Composite +0.44% as of 04:10 ET

Jul 01 ,2026

• Synopsis:

  • Asia markets ended a little directionless Wednesday in a quiet day's trading with Hong Kong closed for a holiday. Japan's main benchmarks closed with small gains alongside Shanghai and most of Southeast Asia. Taiwan's Taiex outperformed with a 2% gain. Some losses in Shenzhen, Australia and South Korea. India trading higher as sentiment there improved further. Hong Kong closed for a holiday. US futures indicate small losses at the open, Europe slightly lower in the first hour. US dollar edging higher, some weakness in Asia currencies with the AUD underperforming. Treasury and JGB yields higher. Precious metals back under pressure, industrial metals weaker. Crude prices paring early gains. Cryptocurrencies bouncing back off overnight lows.

  • Asia equities drifted on the first day of H2 and, with few fresh drivers of note, ended with a mixed picture. Better sentiment in Japan broadened after the Tankan survey for June improved and beat consensus, supporting a broad advance on the Nikkei and Topix, while Taiwan's Taiex was pulled higher by positive stock momentum at TSMC (2330.TT) and Mediatek (2454.TT). The Kospi fell as Samsung Electronics (005930.KS) and SK Hynix (000660.KS) succumbed to some profit taking. More broadly, sentiment stalled on a roadblock in US-Iran talks after Tehran representative said they would not meet with US negotiators face to face which sent crude higher for a time while investors await Fed Chair Warsh's comments at an ECB conference later today.

  • In regional developments, India's finance ministry said growth prospects for the country have improved following the end of hostilities in the Gulf and oil price declines. Regional PMIs for June showed manufacturing broadly expanded again however there was evidence the recent surge may have peaked as new order components dipped in many places. South Korea's export growth maintained its momentum as semiconductor shipments tripling as demand remained elevated. Currency traders remain on the lookout for intervention from Tokyo and Seoul after the yen and won reached fresh multi-year lows but several analysts overnight suggested ¥165 per dollar maybe the new red line for Tokyo as authorities eye a strong US dollar as partly to blame for the yen's weakness.

  • Xiaomi (1810.HK), Oppo and Vivo (12LSTG-E ) all cut smartphone targets after suffering component shortages and rising costs, according to a Nikkei report. Meituan (3690.HK ) says its new AI model has been trained on chips made exclusively in China. Kolon Industries (120110.KS) said it has chosen IMM Private Equity as its preferred bidder for its display and semiconductors unit. Perpetual (PPT.AU) said it had received a potential takeover approach just months after selling its wealth management unit; stock strongly higher.

• Digest:

  • BOJ June Tankan beats, inflation expectations creep higher:

    • Headline BOJ Tankan large manufacturer business conditions DI was 22 in June, above consensus 16 and follows 17 in March, extending improvements to a fifth straight quarter to the highest level since March 2018. Takeaways credited AI as the underlying growth driver providing broad tailwinds for the corporate sector (Nikkei).

    • Focusing on Middle East impacts, survey period was stated at 28-May to 30-Jun and most responses were said to have been submitted before the US and Iran reached agreement on the MOU on 15-Jun. Petroleum & coal lagged, though positive contributions were equally balanced between upstream and downstream sectors on aggregate. September outlook index seen lower at 17 despite an outsized rebound in petroleum & coal.

    • Large nonmanufacturer DI edged higher to 37, above consensus and March reading of 36. Most sectors logged mild improvement, though led by a double-digit gain in accommodation & dining. Outlook index similarly lower, reflecting broadly based caution. Inflation and Middle East uncertainties cited as the main overhangs affecting the outlook.

    • Large firm FY26 capex projection revised up notably to +11.5%, slightly better than expectations of +11.0%, following +3.3% in March. While upgrades are largely a function of seasonality, current trajectory caught up with FY25, moving further above the long-term average. Similar improvement in all-enterprise basis. Recall thoughts that relatively subdued March reading may have reflected uncertainties caused by the Middle East.

    • However, earnings outlook remains negative with all enterprises and large firms both forecasting a 6.5% drop in current profits. Some of the weakness can be explained by upward revisions to FY25. FY26 profile shows H2 broadly upgraded while remaining negative, offset by downgrades to H1. Contrasts with expectations for stronger growth in sales. Also contradicts narrower segments sampled by Nikkei (listed firms with March FY-end) that showed aggregate FY26 guidance turned positive.

    • Inflation readings broadly strengthened. Price DIs higher across all major categories led by materials sectors. Double digit increases in input prices running somewhat ahead of output prices, implying a squeeze in margins. Matches with lower expected FY26 current profit to sales ratios. Amid BOJ rate hikes, more closely watched inflation expectations ticked higher across all time horizons into the upper 2% range.

  • South Korea exports in June hit new all-time high:

    • South Korea exports hit fresh high in June by topping $100B for first time on strong sales of chips amid global AI boom (Yonhap, Reuters, Bloomberg). Exports surged 70.9% y/y to $102.25B, above expectations of 60.9% and revised 53.4% in May, also marking biggest increase since Oct-1978. Shipments adjusted for working-day differences rose 59.5%. Imports rose 30.1% y/y to $66.1B, beating expectations of 24.5% and revised 20.7% in May, resulting in a trade surplus of $36.2B, first time the data surpassed $30B. Exports of semiconductors nearly tripled to $44.8B, while shipments of computer-related products and petroleum products rose 308.8% and 49.8% respectively. By destination, exports to China and US were up by 92.1% and 78.6% respectively. Exports to ASEAN also remained strong amid continued demand for AI products across Asia, while shipments to Middle East fell. Data highlighted South Korea's chip-led, export-driven growth remains strong, helping offset weakness across more traditional industries. Also likely reinforced BOK's more hawkish stance as policymakers noted semiconductor boom spills into wider economy. Attention shifts to inflation data on Thursday after May CPI accelerated to fastest pace in more than two years.

  • June PMIs show signs of fatigue in Emerging Asia manufacturing growth:

    • S&PGlobal June PMI readings showed continued expansion in Asia's manufacturing sector but sub-components showed early signs of slowing growth. South Korea's overall reading fell to 52.1 from 54.8 after slowest rise in new orders YTD led to output growth slowing to five-month low; firms reported rising raw material prices, supply chain difficulties added to input costs that continued to rise. Taiwan's headline reading slipped marginally to 56.1 from 55.2, still strong, but S&P economist warned stocks of unfinished goods subcomponent rose at fastest pace in more than 15 years. Input costs also continued to rise rapidly.

    • China RatingDog PMI saw marginally slower expansion at 51.7 from 51.8; report said component readings showed steady improvement with new orders expanding for 13th consecutive month although new export order growth declined slightly. Manufacturing output and employment also improved. Reading joined official PMI posted Tuesday that showed marginal improvement in overall conditions as tech and downstream sectors grew to offset upstream segments.

    • ASEAN reading fell to 11-month low, albeit still showing expansion, as output and new order growth weakened, new export orders fell strongly. Overall reading at 50.5 from 51.5. Much of decline due to deterioration in Indonesia where new orders, employment, purchasing all declined leading to headline PMI contraction at 46.9 from 50.0 in May. In contrast, Thailand, Philippines, Malaysia, Vietnam all maintained growth with marked improvement in new orders, output.

  • Yen buyers retreat with no sign of imminent intervention:

    • Nikkei discussed latest FX market talk after the latest sustained breach of 162 in USD/JPY to mark the weakest yen level in 39-and-a-half years. Driven mainly by dollar strength, fading caution against intervention is encouraging expectations of further declines. Some thoughts the absence of MOF signals is freeing up pent-up selling interest. Elevated options open interest at the 161.95 and 162.00 strikes indicated this range as a pivotal threshold. Importer dollar purchases also said to have been elevated at month-end. Dollar has so far defied expectations of unwinding in haven positions built up during the Middle East conflict. One explanation is that investors now looking to US economic strength and hawkish Fed as the next themes auguring for a continuation of dollar strength even as geopolitical risks subside. Furthermore, foreign investor hedging against Japan equity gains has notably added to selling interest, which all add to the list of reasons making it difficult for MOF to argue that momentum is being driven by speculators. Article noted there is yet no consensus on the next support level. In the absence of new catalysts (especially support factors), signs seem to point to further gradual depreciation.

  • India says growth prospects have brightened after oil price tumble:

    • India Economic Affairs Ministry monthly report said country's growth prospects brightened following middle east ceasefire as commodity prices decline has reduced inflation risks. Said economy showing resilience but warned weakness in high-frequency indicators including consumer sentiment and labor markets suggest gradual easing of momentum ahead. Report also noted risks still loom from geopolitical tension, uneven monsoon and El Niño impact but agriculture policy under review to develop climate-resilient crops, disincentivize water-intensive ones. Authorities also working on policies to enhance resilience to energy shocks. Said 'matter of time' before equity inflows turn positive as concerns over global AI bubble mount, recent trade agreements should support overseas capital inflow while exports remain 'bright spot'. Bloomberg noted global funds invested $5.2B in index-eligible debt market in June following tax breaks and other announcement of other measures to support rupee.

  • Notable Gainers:

    • +3.2% 120110.KS (Kolon Industries): Selects IMM Private Equity as preferred bidder for display and semiconductor materials units - Chosun, citing IB industry sources

    • +2.2% 018670.KS (SK Gas): Completes sale of 49% stake in Ulsan GPS to consortium of Stick and Korea Investment for KRW1.224T - KED

    • +1.0% 009150.KS (Samsung Electro-Mechanics Co.): To invest KRW15T in MLCC, FC-BGA capacity expansion - Seoul Economic Daily

    • +0.6% 9984.JP (SoftBank Group): Japan METI to provide ¥387.3B development funding for FY26 to back Softbank-led physical AI models - Asahi

  • Notable Decliners:

    • -14% 9956.JP (Valor Holdings): Conducts 4.7M-share public offering; forms capital and business alliance with KOHNAN SHOJI

    • -0.4% 7780.JP (Menicon): Menicon subsidiary acquires Inter-Optical; terms undisclosed

• Data:

  • Economic:

    • China

      • June RatingDog Manufacturing PMI 51.7 vs consensus 51.6 and 51.8 in prior month

    • Japan June

      • Tankan large manufacturers business conditions index 22 vs consensus 16 and 17 in March

        • September Large non-manufacturers business conditions index 37 vs consensus 36 and 36 in March

      • Large non-manufacturers business conditions index 37 vs consensus 36 and 36 in March

        • September large non-manufacturers business conditions outlook forecast 28 vs consensus 29

      • Final manufacturing PMI 54.8 vs flash 54.9 and 54.5 in prior month

    • South Korea

      • June trade balance $36.2B vs consensus $32.6B and $27.0B in prior month

        • Exports +70.9% y/y vs consensus +60.9% and +53.4% in prior month

        • Imports +30.1% y/y vs consensus +24.5% and +20.7% in prior month

    • Australia

      • May building approvals (1.1%) m/m vs consensus +1.0% and (3.4%) in April

  • Markets:

    • Nikkei: 412.64 or +0.59% to 70474.96

    • Hang Seng: 0.00 or 0.00% to 22881.02

    • Shanghai Composite: 18.05 or +0.44% to 4112.45

    • Shenzhen Composite: 11.14 or +0.39% to 2851.81

    • ASX200: (55.80) or (0.64%) to 8722.90

    • KOSPI: (173.07) or (2.04%) to 8303.41

    • SENSEX: 533.73 or +0.70% to 77012.40

  • Currencies:

    • $-¥: +0.12 or +0.07% to 162.6960

    • $-KRW: +6.76 or +0.44% to 1554.9820

    • A$-$: (0.00) or (0.40%) to 0.6892

    • $-INR: +0.53 or +0.56% to 95.0309

    • $-CNY: (0.00) or (0.01%) to 6.7929