Asia report: Markets bounce back despite Wall Street sell-off
Markets across the Asia-Pacific region advanced on Thursday, defying a sharp overnight decline on Wall Street that was triggered by renewed concerns over US monetary policy and a steep sell-off in Nvidia shares.
Federal Reserve chair Jerome Powell warned on Wednesday that persistent trade tensions could complicate the central bank’s objectives of controlling inflation and sustaining employment, prompting a risk-off mood in the US market.
“Asian markets saw a slight uptick, while the yen weakened as investors responded positively to the initial round of trade talks between the US and Japan,” said TickMill market strategy partner Patrick Munnelly.
“Japanese stocks posted modest gains after President Donald Trump announced significant progress in discussions aimed at preventing higher tariffs on Japan.
“The yen depreciated following remarks from Japan's chief trade negotiator, who clarified that currency issues were not part of the talks, alleviating concerns that the US might demand a stronger yen.”
Munnelly said that, following recent turbulence from broad US tariffs, global investors were now concentrating on the progress of country-specific negotiations before making major investment decisions.
“A significant uncertainty remains regarding talks with China, as Beijing has expressed the need for certain actions from Trump's administration before agreeing to trade discussions.
“The two-day stock consolidation ended on Wednesday after the US escalated trade tensions by imposing restrictions on some Nvidia chip exports.
“Fed chair Powell's comments after the London market close, which warned of a stagflationary outlook, further unsettled markets as he emphasised the importance of price stability in the Fed's dual mandate.”
Most markets rise despite Wall Street losses
Japan led regional gains, with the Nikkei 225 rising 1.35% to 34,377.60, supported by sharp rallies in individual names such as Sumitomo Dainippon Pharma, which surged 19.69%, CyberAgent up 9.21%, and Kawasaki Heavy Industries climbing 7.05%.
The broader Topix index also rose 1.29% to 2,530.23.
In Hong Kong, the Hang Seng Index gained 1.61% to close at 21,395.14, buoyed by strong performances in NetEase, Longfor Properties, and China Resources Beer.
Mainland Chinese markets were mixed - the Shanghai Composite edged up 0.13% to 3,280.34, while the Shenzhen Component slipped 0.16% to 9,759.05.
South Korea’s Kospi 100 rose 0.83% to 2,450.61, helped by notable advances in Hanwha Solutions, Hyundai-Rotem, and LS Industrial Systems.
In Australia, the S&P/ASX 200 climbed 0.78% to 7,819.10, with gains led by Challenger, Ampol, and Lynas Rare Earths.
New Zealand’s S&P/NZX 50 rose 0.42% to 12,118.99, supported by strong showings from Serko and Vista Group International.
In currency markets, the dollar was last up 0.67% on the yen, trading at JPY 142.83, as it added 0.25% against the Aussie to AUD 1.5736, and strengthened 0.12% on the Kiwi, changing hands at NZD 1.6873.
Oil prices were also in the green, with Brent crude futures last up 0.76% on ICE at $66.35 per barrel, and the NYMEX quote for West Texas Intermediate adding 0.88% to $63.02.
Bank of Korea stands pat on interest rates, export growth slows in Japan
South Korea’s central bank left its benchmark interest rate unchanged at 2.75% on Thursday, as policymakers weigh the economic impact of new US tariffs and political uncertainty ahead of a snap presidential election.
The decision was widely expected, matching forecasts from a Reuters poll of economists.
Earlier in the week, finance minister Choi Sang-mok told lawmakers that Seoul would seek to delay the implementation of the tariffs through negotiations with Washington.
In Japan, export growth slowed in March, with outbound shipments rising 3.9% from a year earlier - below the 4.5% increase forecast by economists and sharply down from February’s 11.4% gain.
Despite the continued growth, Japan’s trade deficit narrowed only slightly to JPY 544.1bn, wider than the JPY 485.3bn expected, and down from February’s JPY 590.5bn shortfall.
Australia’s labour market meanwhile showed signs of cooling as the economy added 32,200 jobs in March, missing expectations for a 40,000 increase.
The seasonally-adjusted unemployment rate ticked up to 4.1% from 4% a month earlier, though still slightly below the 4.2% level projected in a Reuters survey.
Singapore’s trade figures also underwhelmed.
Non-oil domestic exports rose 5.4% in March from a year earlier, falling short of the 14.1% growth forecast and down from a 7.6% gain in February.
On a month-to-month basis, exports declined 7.6%, reversing a 2.6% rise in February and far worse than the 0.5% drop economists had expected.
In response to rising global uncertainties, including US trade actions, prime minister Lawrence Wong announced the formation of a Singapore Economic Resilience Taskforce to support local businesses and workers.
Reporting by Josh White for Sharecast.com.