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StreetAccount Summary - Asian Market Recap: Nikkei (2.47%), Hang Seng +0.76%, Shanghai Composite (2.03%) as of 04:10 ET

Jul 02 ,2026

• Synopsis:

  • Asia equities ended mixed Thursday. South Korea's Kospi declined almost 8% amid steep declines in chip stocks. The Nikkei 225 also fell sharply while the Taiex also fell, albeit by a modest amount. Shenzhen's main index was also under pressure while the Shanghai Composite declined around 2%. Some gains in Hong Kong, India, and Singapore. US futures flat, Europe markets opened flat. US dollar slipped in afternoon trade, won bounced back from early weakness and the yen is noticeably stronger in late trade. Treasury yields higher. Crude futures lower, precious metals mixed, iron ore notably higher after hitting a year-long low. Cryptocurrencies mostly higher.

  • Memory stocks back under severe pressure Thursday following the sharp contraction in the SOX overnight. Samsung Electronics (005930.KS) fell 15% and SK Hynix (000660.KS) slid more than 18% to trigger a side-car trading halt again in the local futures market and to drag the Kospi down nearly 8%. In Japan, Tokyo Electron (8035.JP) and Advantest (6857.JP) weighed on the Nikkei 225, and in Taipei, the Taiex was less volatile but still closed lower. The trigger for the tech selloff overnight was a report that Meta was planning to sell computing power that raised concerns over a glut of capacity which offset bearish comments from new Fed Chair Warsh.

  • Currency traders remained on high alert over the day as the won and yen hovered near multi-year lows for much of the day before a notable strengthening in afternoon trade just as reports emerged Seoul and Tokyo were discussing the forex market together with allies. Elsewhere, South Korea June CPI rose to its highest since Dec-23 as fuel import costs rose but was in line with forecasts. Separately, the OECD warned South Korea over its dependence on chip exports. Australia's May trade balance moved to its largest deficit in 11 years on a surge in fuel imports and prices.

  • SoftBank (9984.JP) renews talks for $10B loan against its OpenAI stake with concessions. Alibaba (9988.HK) has agreed to pay $600M to resolve an investigation into importing and selling illegal pharmaceuticals in the US. China Resources New Energy (001248.CH) began trading in Shenzhen and closed almost 140% higher after raising CNY24.5B in Asia's largest IPO YTD. Apple is in talks with US authorities to buy chips from sanctioned Chinese companies ChangXin Memory Tech (+CXMT.CH) and Yangtze Memory Tech (0HCR9G-E). Hanwha Ocean (042660.KS) chosen as preferred bidder for South Korea's next-generation Navy destroyer project. Northern Star Resources (NST.AU) is to replace its CEO following pressure from activist investor Elliott Investment Management. Perpetual (PPT.AU) has rebuffed a $1.7B takeover offer from private equity group EQT (EQT.AU) on valuation grounds.

• Digest:

  • South Korean stocks gripped by volatility:

    • South Korea's Kospi sold off Thursday with volatility triggering another futures trading halt. Samsung Electronics (005930.KS) and SK Hynix (000660.KS) the main drags with demand uncertainty in focus as tech hardware firms respond to surging memory costs. Bloomberg sources noted Apple (AAPL) in talks to purchase chips from Chinese memory makers CXMT and YMTC, as it looks to diversify suppliers after raising prices last week.

    • Report META planning to sell excess compute tying into concerns about overcapacity. Follows recent BIS analysis warning of hyperscaler capex overcommitment, illustrating downside risk of AI exuberance. Recent investment announcements by SK Hynix and Samsung Electronics drew mixed takeaways with huge investment sums and multi-year timeframe raising concerns of financial reckoning if memory boom falters.

    • Volatility inviting more bubble discussions amid growth of leveraged ETFs and their role in magnifying market swings, compounded by extreme concentration with SK Hynix and Samsung Electronics comprising more than 50% of index. Single stock ETFs focused on the two companies recorded consecutive drops of ~10%. Massive ETF trading volumes blamed for magnifying market downside in recent sessions.

    • FX volatility intertwined with equity market turbulence with Kospi facing relentless foreign outflows and Korean won lowest against dollar since 2008/09 financial crisis. While equity outflows considered more a function of mechanical selling as overseas funds hit exposure limits, foreign demand for dollars has increased amid rising Treasury yields.

  • Yen market defaults to dollar factors in the absence of intervention signals:

    • Yen notably firmer Thursday in early London hours. Momentum was moderate in the Tokyo session and domestic narrative concentrated on US factors -- dollar softer, Warsh effects (still hawkish) and focus on upcoming US payrolls data. Latest Warsh rhetoric at the Sintra ECB Forum curbed some rate hike expectations since the FOMC meeting, though marginal undulations in tone seen unlikely to be a major swing factor for yen. Latest reports indicated solidifying consensus for moderation in US job growth encouraged profit taking on short yen positions.

    • On the downside, markets remain wary of FX intervention risk, though MOF messaging still yet to ramp as was the case in the lead-up to Golden Week at the end of April. Latest actual rhetoric has been indirect at best. In a Bloomberg interview yesterday, FX policy chief Mimura talked up the efficacy of intervention (pushing back against the broadly skeptical market narrative) as well as the frequent contact with US counterparts to highlight they are on the same page (echoing comments from Finance Minister Katayama).

    • Implications were nuanced. Article suggested remarks indicate Mimura continues to see intervention as a viable tool. While refraining from reiterating stock phrasing on their stance, including readiness to take 'bold action' at any time, it may be an attempt to retain a degree of surprise if they decide to step in. Still, with authorities apparently toning down their language, this has opened up bearish market projections with some seeing the next key threshold in the 164-165 range.

    • Reuters, citing two sources, reported officials are abandoning their communications strategy to date, instead signaling a more targeted campaign to squeeze speculators and raise the cost of shorting a weakening yen. They are also said to be avoiding any suggestion of a specific "line in the sand" (albeit this stance has been longstanding). There were no specifics on the mechanics of the new strategy, and the story generally implied authorities seek to optimize intervention impact via surprise and timing to shake speculators out of short positions.

  • China home-made memory chips gain more recognition:

    • More press discussions on how China's domestic memory chips are gaining international recognition. Bloomberg reported Apple (AAPL) in negotiations to buy memory components for devices sold in China from ChangXin Memory Technologies (+CXMT.CH) and Yangtze Memory Technologies(0HCR9G-E), both on Pentagon's 1260H list that alleged them of supporting PLA. Corroborated FT report last week that Apple was lobbying Trump administration for clearance to buy memory chips from CXMT. Move came as Apple and other consumer electronics face unprecedented supply crunch in DRAM chips as memory suppliers shifting more production to HBM that more widely used in AI data centers. China hawks in Washington already raising their objections. Nevertheless Chinese press (link) said interest from Apple in Chinese DRAM products provided golden window of opportunity for development of domestic chips. Added Roundhill Memory ETF (DRAM) (link) has recently added GigaDevice Semiconductor (603986.CH) to its holdings, first for a Chinese company. Noted CXMT and GigaDevice Semiconductor shared a common co-founder (Caixin). Recall CXMT also planning CNY29.5B ($4.3B) IPO on Shanghai's STAR Board, setting it up to be one of mainland's largest listings in years, while it has signed long-term supply agreement with Tencent (700.HK) worth more than CNY20B (Reuters).

  • Foreign buying of Japan equities set to post record high in H1, AI theme causing K-shaped market:

    • Nikkei highlighted the surge of foreign inflows into Japan equities to an all-time high above JPY10T ($62B) in H1 with one week left to count. Figures were based on TSE data through the third week of June. Story did not note what the record for a whole calendar year is, but current tally is already double the JPY5.4T in all of 2025. Key milestone is that current momentum has surpassed the peak of the Abenomics phase in 1H13 (JPY8.3T).

    • AI related plays drawing the main attention as tailwinds extend beyond semiconductor makers to other sectors exposed to data center and other infrastructure business. BofA noted recognition of Japan's competitive advantage in AI hardware space. Article ranked Nikkei constituents with a March FY-end based on the growth in foreign ownership in the year through March and found some 40 names saw increases. Furukawa Electric (5801.JP) took first place +19.6 ppt, followed by Mitsui Kinzoku (5706.JP) +15.0 and Kioxia (285A.JP) +12.3 -- all AI infrastructure plays.

    • Separate Nikkei discussion focused on AI permeation. Noted Japan offers plenty of rotation options to cycle out of overvalued names while remaining within the AI theme -- MLCC names were in the spotlight in Q2. Monthly single stock price action in each month offered supportive evidence with top performers in Apr/May being supplanted in June as preference seemingly shifted to semiconductor making equipment.

    • Core of the article was based on Nomura analysis that contrasted the top performers in Topix 500 over Q2 against the laggards and found that much of the positive group was comprised of AI plays. One of the key conclusions was that rotation can stay within the AI space without spreading to other sectors. This added to concerns about the narrowly based market strength as the narrative has shifted from a broader 'buy Japan' to 'buy Japan AI.' Mizuho pointed out potential undervalued segments such as large retailers and financials buoyed by rate hikes.

  • Street Takeaways: BOJ June Tankan

    • Economist takeaways from the BOJ June Tankan survey were broadly positive. Notable attention on the survey period as most responses were submitted before the US-Iran peace deal was reached. However, implications were generally positive as consummation of the MOU further lifted uncertainty while there were other tailwinds active during the period including record stock market levels driven by AI, easing crude oil prices and weaker yen. Key developments affirmed the dissipation of downside cyclical risks and upside inflation risks -- consistent with the BOJ's economic assessment. Analysis essentially contained a bullish bias, focused any pertinent threats to a recovery described more as secular than cyclical, encapsulated by strong capex growth. There was some debate over the relative underperformance in nonmanufacturers and small firms, as well as softer outlook DIs, the latter may have stemmed from concerns about deteriorating terms of trade. The strengthening in inflation expectations was highlighted as remarkable. Results underpinned the BOJ's normalization stance though did not prompt economists to bring forward estimates for the next rate hike. Notably, the most hawkish camp reaffirmed calls for October while others indicated another solid tone in the September survey may justify an earlier move.

  • Notable Gainers:

    • +8.1% 1211.HK (BYD Co.): reports June vehicle production volume 403,246 units vs year-ago 345,066 units

    • +4.4% 1810.HK (Xiaomi): reports June vehicle deliveries over 30K units; StreetAccount notes the year-ago number was more than 25K units

    • +4.3% 9202.JP (ANA HOLDINGS): reportedly considering launching around ¥100.0B share buyback by FY ending March 2031; upgraded to buy at Nomura

    • +3.7% 2371.JP (Kakaku.com): LY Corp., Bain officially submit binding tender offer at base price of ¥3,384/share

    • +2.5% 6758.JP (Sony): discontinues disc production for all new games releasing on PlayStation consoles starting Jan-28

    • +1.2% 042660.KS (Hanwha Ocean): selected as preferred bidder for the destroyer (KDDX) ordered by the Defense Acquisition Program Administration

    • +0.8% 005490.KS (POSCO): provides portfolio transformation strategy; guide FY28 revenue KRW87.9T vs FactSet KRW78.139T

  • Notable Decliners:

    • -8.9% 023530.KS (Lotte Shopping Co.): terminates merger with ContentreeJoongAng

    • -5.0% 7564.JP (Workman): reports June same-store sales (8.8%) y/y

• Data:

  • Economic:

    • South Korea June

      • CPI +3.2% y/y vs FactSet consensus +3.2% and +3.1% in prior month

        • CPI ex-food & energy +2.5% vs +2.5% in prior month

    • Australia May

      • Trade balance (A$3.02B) vs consensus A$2.17B and revised A$1.38B in April

        • Exports (6.9%) y/y vs +7.2% in April

        • Imports +2.6% y/y vs +0.8% in April

    • New Zealand May

      • Building permits m/m (4.01%) versus +11.07% in prior month

  • Markets:

    • Nikkei: (1,741.81) or (2.47%) to 68733.15

    • Hang Seng: 174.01 or +0.76% to 23055.03

    • Shanghai Composite: (83.54) or (2.03%) to 4028.90

    • Shenzhen Composite: (80.19) or (2.81%) to 2771.62

    • ASX200: 1.60 or +0.02% to 8724.50

    • KOSPI: (655.32) or (7.89%) to 7648.09

    • SENSEX: 488.49 or +0.64% to 77411.13

  • Currencies:

    • $-¥: (1.33) or (0.82%) to 161.2610

    • $-KRW: (4.12) or (0.27%) to 1546.4400

    • A$-$: +0.00 or +0.06% to 0.6897

    • $-INR: (0.04) or (0.04%) to 95.1763

    • $-CNY: (0.01) or (0.10%) to 6.7879