TOKYO: Asian markets made a bright start to 2026 on Friday (Jan 2) but volumes were thin with Tokyo and Shanghai still closed as investors awaited fresh direction from Wall Street.
Stocks had a bumper 2025, with the S&P adding 16.4 per cent, the tech-rich Nasdaq 20.4 per cent and London’s FTSE enjoying its merriest Christmas in 16 years.
In Asia, Seoul stocks whooshed 75 per cent, while Hong Kong’s Hang Seng index bounced 28 per cent and Tokyo’s Nikkei 225 rocketed more than 26 per cent.
“Naturally, the start of the new year comes with the question everyone asks moving from one year to the next: will this continue? The consensus is that, yes, it will,” said Kyle Rodda at Australian brokerage Capital.com.
“When it comes to the all important US economy, Wall Street is pricing in growth will accelerate this year while inflation still moderates and interest rates get cut. Meanwhile, analysts predict that corporate fundamentals will improve,” Rodda said.
Hong Kong was up 2.2 per cent Friday with chip designer Biren Technologies roaring 80 per cent higher after its initial public offering.
The Shanghai-based firm’s listing raised more than US$700 million, suggesting that investor appetite for anything related to artificial intelligenge remains insatiable.
Biren “enjoys scarcity value and high market attention”, said Kenny Ng, a strategist at China Everbright Securities.
“The industry is in a flourishing stage, with many firms striving for breakthroughs and significant growth potential,” Ng said.
Search-engine giant Baidu jumped almost seven per cent after saying its AI chip unit Kunlunxin had filed a listing application in Hong Kong.
Taipei, Sydney, Jakarta, Manila and Singapore also advanced while Seoul’s Kospi, which soared 76 per cent in 2025 in large part due to AI boom, was up 1.7 per cent.
Samsung Electronics added three per cent after co-CEO Jun Young Hyun said customers had praised its high-bandwidth memory (HBM) chips, some saying that “Samsung is back”, Bloomberg News reported.
After volatile recent days, following record highs for silver, precious metals started the new year on a bright note with gold up 0.64 per cent per ounce and silver 1.5 per cent shinier.
(Reuters) – A look at the day ahead in Asian markets.
Global markets will be overwhelmingly dominated by the U.S. presidential election and interest rate decision later this week, so Monday’s activity may be driven by position adjustments as investors take in the latest polls, newsflow, earnings and economic indicators.
If Friday’s moves are any guide, Monday promises to be something of a rollercoaster with no clear, unifying signal. Bond yields shot up to fresh multi-month highs on election and fiscal jitters, reversing an earlier fall on the back of surprisingly weak U.S. employment data, and the dollar duly strengthened.
But Wall Street shrugged off any political or deficit fears. Latching onto strong earnings and a renewed conviction that the Fed will cut rates on Thursday – and probably again next month – stocks rallied strongly.
Can this ‘risk on’ sentiment prevail with the U.S. election so close, and with bond yields on the rise not just in the US but around the world?
The ‘MOVE’ index of implied volatility in U.S. Treasuries is the highest in over a year, and British gilt yields are the highest in a year too. The ‘bond vigilantes’ suffered a bit of whiplash after the U.S. payrolls data on Friday, but soon took charge again.
So traders in Asia on Monday will have to weigh up whether they go with upbeat U.S. earnings and rate cut optimism, or hunker down in the face of rising yields, a stronger dollar and heightened nervousness on the eve of the U.S. election.
Last week was challenging for Asian markets. The MSCI Asia/Pacific ex-Japan index fell for a fourth week in a row last week, and October’s slide of 4.9% marked the worst month since August last year.
After taking in $32.2 billion inflows in September, Asia ex-Japan equity funds recorded “heavy redemptions” in the last three weeks, according to flows tracker EPFR. The latest week saw investors pull over $4 billion from Asia ex-Japan equity funds, extending their longest outflow streak since the fourth quarter of last year.
Much of that is down to outflows from China funds as some of the hyper excitement sparked by Beijing’s raft of measures to support the domestic economy and markets cools off.
But attention will once again center on Beijing this week. China’s top legislative body the National People’s Congress meets on Nov. 4-8, with markets widely expecting the approval of more fiscal stimulus measures.
This week also sees the release of Chinese economic indicators including trade and lending. Other highlights include interest rate decisions from Australia and Malaysia, GDP figures for Indonesia and the Philippines, and earnings from Toyota and Nissan.
Japanese markets are closed for Culture Day on Monday so yen liquidity will be thinner than usual, and yen trading could be choppy, especially given the upward pressure on long-dated yields overseas.
Here are key developments that could provide more direction to markets on Monday:
– India manufacturing PMI (October)
– U.S. presidential election polls
– U.S. bond market weakness
(Reporting by Jamie McGeever, editing by Deepa Babington)
(Bloomberg) — Stocks rallied, tracking gains in Asian markets as a tech-fueled rebound spread globally.
Most Read from Bloomberg
Europe’s Stoxx 600 index jumped 1.2%, the most since mid-August, led by gains in the technology sector. Futures for the S&P 500 were up 0.2%. Treasuries were steady and the dollar was flat. The MSCI Asia Pacific Index climbed the most in almost a month, boosted by gains in the tech-heavy markets of Japan, South Korea and Taiwan.
Risk appetite has returned after the world’s largest technology companies spurred a stock-market bounce on Wall Street on Wednesday. Focus is also on the path for interest rates, with the European Central Bank poised to cut again on Thursday. US inflation data for August supported bets for a Federal Reserve rate cut next week, but fueled speculation officials will move gradually.
Traders have swung between optimism that the Fed will guide the US economy to a soft landing and fear that the central bank has left it too late to cut rates. While swaps have now priced in a 25 basis point rate reduction next week, debate over the path for further reductions continues, and some investors say markets have overpriced expectations.
“Stocks will probably rally more with a 25 bps cut than 50,” because the latter will signal weaker growth, Timothy Moe, chief Asia Pacific equity strategist at Goldman Sachs Group Inc., said on Bloomberg TV.
In corporate news, OpenAI is in talks to raise $6.5 billion from investors at a valuation of $150 billion, according to people familiar with the situation. Nvidia Corp. Chief Executive Officer Jensen Huang said the limited supply of their products has frustrated some customers and raised tensions.
Alimentation Couche-Tard Inc. is discussing improving its takeover proposal for Seven & i Holdings Co. with the goal of convincing the Japanese convenience store operator to start engaging in discussions, people with knowledge of the matter said.
In Japan, the Nikkei index halted a seven-day losing streak as the US inflation print pulled the yen down from its strongest level against the dollar since December. A region-wide gauge of tech stocks rose more than 3% after Nvidia jumped 8.2% overnight, while Taiwan Semiconductor Manufacturing Co. was among top gainers on the regional index.
Oil extended gains from Wednesday as Hurricane Francine ripped through key oil-producing zones in the Gulf of Mexico, prompting traders to cover bearish bets. Gold traded above $2,515 per ounce.
Key events this week:
ECB rate decision, Thursday
US initial jobless claims, PPI, Thursday
Eurozone industrial production, Friday
Japan industrial production, Friday
U. Michigan consumer sentiment, Friday
Some of the main moves in markets:
Stocks
The Stoxx Europe 600 rose 1.2% as of 8:11 a.m. London time
S&P 500 futures rose 0.1%
Nasdaq 100 futures rose 0.2%
Futures on the Dow Jones Industrial Average rose 0.1%
The MSCI Asia Pacific Index rose 1.5%
The MSCI Emerging Markets Index rose 1.3%
Currencies
The Bloomberg Dollar Spot Index was little changed
The euro was little changed at $1.1010
The Japanese yen fell 0.3% to 142.79 per dollar
The offshore yuan was little changed at 7.1282 per dollar
The British pound was little changed at $1.3045
Cryptocurrencies
Bitcoin rose 0.8% to $57,932.51
Ether rose 0.5% to $2,359.36
Bonds
The yield on 10-year Treasuries advanced two basis points to 3.67%
Germany’s 10-year yield advanced two basis points to 2.13%
Britain’s 10-year yield advanced two basis points to 3.78%
Commodities
Brent crude rose 1.4% to $71.59 a barrel
Spot gold rose 0.1% to $2,515.43 an ounce
This story was produced with the assistance of Bloomberg Automation.
(Bloomberg) — Asian markets are poised for losses on Monday as fears of a deeper US economic slowdown roil traders around the globe worried that the Federal Reserve may be behind the curve on rate cuts. Oil climbed on rising tensions in the Middle East.
Most Read from Bloomberg
US futures dropped in early trading, amid the fallout from heavy losses on Wall Street on Friday and Berkshire Hathaway Inc.’s weekend disclosure that it slashed its stake in Apple Inc. by almost half during the second quarter. Contracts indicate that Australian, Japanese and Hong Kong shares are set to drop on Monday.
Berkshire’s selling is “going to be immediately seen as a negative,” said Mark Lehmann, chief executive officer at Citizens JMP Securities. “Apple is the number one player in the global consumer space and that’s the statement about the global consumer.”
Oil rose in early Monday trading after Saudi Arabia lifted the price of crude it sells to Asia and amid reports Iran may strike Israel to avenge assassinations of Hezbollah and Hamas officials. Saudi Arabian and Israeli stocks slumped more than 2% on Sunday, outpacing Friday’s losses on Wall Street.
Japanese shares have plunged in the last two sessions on expectations for more domestic interest rate hikes. The broader Topix index sank more than 6% on Friday, marking its worst day since 2016. The yen has continued its gains, hitting 145.78 against the dollar on Monday, its strongest since January.
Data on Friday showed that US nonfarm payrolls rose by 114,000 in July — one of the weakest prints since the pandemic — and job growth was revised lower in the prior two months. The jobless rate unexpectedly climbed for a fourth month to 4.3%, above the Federal Reserve’s year-end forecast, triggering a closely watched recession indicator.
The S&P 500 saw its worst reaction to jobs data in almost two years, dropping 1.8%. Intel Corp. plunged 26% on a grim growth forecast, adding to a string of poor tech earnings that have sent the Nasdaq 100 down over 10% from its peak to enter a correction.
A worsening conflict in the Middle East risks adding more tumult to markets as investors brace for a turbulent second half of the year. A gauge of bond market volatility has climbed, while the VIX Index – Wall Street’s fear gauge – jumped to the highest in almost 18 months after a weak US jobs report ratcheted fears of a recession, as focus increases on an already chaotic US election race.
“In the next few months global and Australian shares look vulnerable to further falls, suggesting that it’s too early to buy the dip,” said Shane Oliver, chief economist and head of investment strategy at AMP Ltd. in Sydney. “A correction is underway.”
Meantime, US Treasuries climbed Friday, with policy sensitive two-year yields falling to the lowest since May 2023 as worries mount the Fed’s decision to hold rates at a two-decade high is risking a deeper economic slowdown. Traders are projecting the Fed will cut rates by more than a full percentage point in 2024, with an increased chance of an outsized 50-basis point cut in September, according to data compiled by Bloomberg.
“With the unemployment rate above and core PCE inflation now below the Fed’s year-end forecasts, we believe that the balance of risks favors more aggressive action by the Fed,” said Brian Rose, a senior US economist at UBS Group AG’s wealth management unit. “We are changing our base case to rate cuts of 50 basis points in September and 25 basis points each in November and December” after previously just seeing half that amount by year-end, he wrote in a note to clients.
In Asia, traders will soon focus on the private Caixin China services and composite activity data for a further gauge on the health of the world’s second largest economy after manufacturing PMI contracted unexpectedly for the first time in nine months. The data comes as Chinese officials made clear in July that there would be limited aid to spur domestic consumption.
Elsewhere this week, inflation data in Thailand and Chile are due while Mexico and Peru will hold policy decisions as debate rages on the outlook for emerging market dollar and local currency bonds. The Reserve Bank of Australia’s policy meeting will be parsed to confirm bets of easing by year-end, while US economic activity and credit data and speeches from regional Fed bank presidents will be closely watched.
“Better data this week could provide some confidence to a bond market that is grossly overbought and offer reassurances to equity and credit,” Chris Weston, head of research at Pepperstone Group wrote in a note to clients.
“Conversely, if the data continues to weaken and central banks don’t meet the market pricing in their narrative, one thing seems clear: buying the dip in risk may not be as effective this time around, while short sellers will have a far more prosperous hunting ground,” he said.
Key events this week:
Bank of Japan issues minutes of June meeting, Monday
China Caixin services PMI, Monday
Indonesia GDP, Monday
Singapore retail sales, Monday
Thailand CPI, Monday
Eurozone PPI, HCOB Services PMI, Monday
US ISM Services index, Monday
Chicago Fed President Austan Goolsbee speaks, Monday
San Francisco Fed President Mary Daly speaks, Monday
Australia rate decision, Tuesday
Japan cash earnings, Tuesday
Philippines CPI, trade, Tuesday
Eurozone retail sales, Tuesday
US trade, Tuesday
New Zealand unemployment, Wednesday
China trade, Wednesday
Chile copper exports, trade, Wednesday
US consumer credit, Wednesday
ECB Supervisory Board member Elizabeth McCaul speaks, Wednesday
RBA Governor Michele Bullock speaks, Thursday
Philippines GDP, Thursday
India rate decision, Thursday
US initial jobless claims, Thursday
Richmond Fed President Thomas Barkin speaks, Thursday
Chile CPI, Thursday
Colombia CPI, Thursday
Mexico CPI, rate decision Thursday
Peru rate decision, Thursday
China PPI, CPI, Friday
Germany CPI, Friday
Canada unemployment, Friday
Brazil CPI, Friday
Some of the main moves in markets:
Stocks
S&P 500 futures fell 1% as of 8:45 a.m. Tokyo time
Hang Seng futures fell 0.4%
S&P/ASX 200 futures fell 1.5%
Nikkei 225 futures fell 3.1%
Currencies
The Bloomberg Dollar Spot Index was little changed
The euro was little changed at $1.0906
The Japanese yen rose 0.5% to 145.78 per dollar
The offshore yuan rose 0.2% to 7.1494 per dollar
The Australian dollar fell 0.1% to $0.6502
Cryptocurrencies
Bitcoin fell 1.4% to $58,304.18
Ether fell 1.8% to $2,700.26
Commodities
Bonds
This story was produced with the assistance of Bloomberg Automation.
(Reuters) – A look at the day ahead in Asian markets.
Asian markets on Monday get their first chance to react to the extraordinary market moves on Friday that saw stocks and bond yields tumble, and volatility and rate cut expectations soar following an unexpectedly soft U.S. employment report.
That ‘risk off’ sentiment and momentum is sure to spill over into Asia, which was already wobbling last week after the Bank of Japan’s hawkish policy tilt, yet more sluggish Chinese economic data and some weak U.S. tech earnings.
The MSCI Asia ex-Japan stock index slumped 2.5% on Friday, its biggest fall in over two years, and Japan’s Nikkei 225 index tanked 5.8% for its biggest fall since March 2020. Japan’s broader Topix’s 6.1% slide marked its worst day since 2016.
Given Friday’s U.S. payrolls-fueled selling on Wall Street, a sharp selloff in Asia early Monday is likely. Friday’s market gyrations may prove to be excessive, but they are worth noting.
The two-year U.S. Treasury yield plunged 30 basis points, its steepest one-day fall since the U.S. regional banking shock of March last year. Its weekly fall of 50 bps is in line with those seen in the COVID-19, Lehman, 9/11 and Black Monday crises.
In equities, the VIX volatility index at one point on Friday had doubled from the previous day.
The stampede to unwind carry trades helped push the yen up nearly 5% against the dollar last week – the Japanese currency has only had three better weeks in the past 25 years.
Plunging U.S. bond yields may ease financial conditions – Goldman Sachs’s emerging market financial conditions index on Friday fell to its lowest since March – but they’re loosening for ‘bad’ reasons, namely recession fears.
Hopes for the much-vaunted U.S. economic ‘soft landing’ appear to have completely evaporated, replaced by fears of a ‘hard landing’.
Traders are now attaching a 70% chance to the Fed cutting rates by half a percentage point next month, and are pricing in 115 basis points of easing by the end of the year and over 200 bps by next June.
High yield corporate debt markets will be worth watching closely. This is where the first signs of a ‘credit event’ usually appear, heralding wider retrenchment across businesses, rising unemployment and ultimately recession.
High yield U.S. debt spreads over Treasuries jumped on Friday to the widest of the year of more than 370 bps, but that was mostly due to the slump in government bond yields rather than investors dumping corporate debt. If that dynamic changes, hold onto your hats.
Monday’s economic and events calendar in Asia includes service sector purchasing managers index data from across the continent including China, inflation figures from Thailand, GDP numbers from Indonesia and some Japanese earnings.
Here are key developments that could provide more direction to markets on Monday:
– China ‘unofficial’ services PMI (July)
– Thailand consumer price inflation (July)
– Indonesia GDP (Q2)
(Reporting by Jamie McGeever; Editing by Diane Craft)
(Bloomberg) — Asian stocks swung to a loss and US equity futures fell as slowing Chinese industrial profit growth sapped optimism after last week’s equity rally. The yen strengthened against all its Group-of-10 peers.
Most Read from Bloomberg
China shares led declines as data showed profits at the nation’s industrial companies climbed at a slower pace, suggesting the economic recovery remains uncertain. The Hang Seng China Enterprises Index dropped as much as 1.4% while CSI 300 Index closed 1.2% lower in Monday’s morning session. Benchmarks also fell in Australia and Japan.
Equities trimmed some of last week’s gains amid uncertainty before the next installment of key global economic data this week including euro-zone inflation data, China PMIs and US personal consumption numbers on Thursday, and US, European and Chinese PMIs on Friday. Asian markets had little direction from the US following the holiday shortened post-Thanksgiving session Friday.
“We’ve seen US bond yields gap higher at the open, and that has weighed on equity market sentiment to send US futures down alongside Chinese markets that are already under pressure from weak industrial profits,” said Matt Simpson, a senior market strategist at City Index Inc.
US stock futures dropped in Asia after the S&P 500 capped a fourth week of gains Friday, when the VIX — Wall Street’s “fear gauge” and a measure of equity volatility — fell to its lowest level since January 2020.
The subdued growth at Chinese industrial companies will likely keep firms cautious about expanding or hiring more, which in turn could add more pressure on prices. Profits increased just 2.7% in October from a year ago, down from September’s 11.9% gain.
“The profit numbers show that current recovery momentum is still fairly fragile,” Dong Chen, head of Asia macroeconomic research at Pictet Wealth Management, said in an interview with Bloomberg Television. “We still have a long way to go to get out of the woods.”
This week, investors will be looking especially closely at Chinese activity data to gauge the health of the world’s second largest economy. Traders will be assessing shadow banking stocks after Chinese authorities said they recently opened criminal investigations into the money management business of Zhongzhi Enterprise Group Co.
In Hong Kong, the one-month interbank offered rate jumped to the highest since 2007 as the supply of cash tightened toward year-end.
‘Remain Heavy’
Treasury 10-year yields climbed as much as five basis points to 4.51%, the highest in more than a week.
The dollar was mixed in Asian trade after Bloomberg’s index of the greenback slipped 0.5% last week.
The US currency may “remain heavy” for most of the week as fund managers adjust hedges and cash heads into developing economies, Commonwealth Bank of Australia strategists including Joseph Capurso wrote in a note to clients. “The backdrop of low volatility and expectations for a soft landing in the US economy supports portfolio capital flows into emerging markets,” they said.
In earnings due this week, Crowdstrike Holdings Inc. will underscore how businesses are prioritizing cybersecurity after recent high-profile corporate hacks, while Salesforce Inc. and Dell Technologies Inc. are expected to post slower sales growth as overall corporate expenditure tightens.
Traders will also be keeping an eye on gold and oil after Israel and Hamas signaled that a temporary cease-fire in Gaza could be extended beyond Monday to allow for the release of more hostages and prisoners. Oil fell for a fourth day as traders looked ahead to this week’s delayed OPEC+ meeting and wider financial markets carried a risk-off tone.
Key events this week:
European Central Bank President Christine Lagarde appears in parliamentary committee, Monday
Australia retail sales, Tuesday
NATO foreign ministers meet, Tuesday
US Conf. Board consumer confidence, Tuesday
Fed Governor Chris Waller, Chicago Fed President Austan Goolsbee speak at different events, Tuesday
Australia CPI, Wednesday
Reserve Bank of New Zealand policy decision, Wednesday
Asian share markets slipped on Monday following another drubbing for Wall Street as investors brace for further drastic tightening in global financial conditions, with all the risks of recession that brings.
Concerns about financial stability added to the corrosive mix with all eyes on UK bonds now that the Bank of England’s (BoE’s) emergency buying spree is over.
Prime Minister Liz Truss decision to fire her finance minister might help reassure investors, but her own fate is unclear with media reporting Tory lawmakers will try and replace her this week.
BoE Governor Andrew Bailey warned over the weekend that rates might have to rise by more than thought just a couple of months ago.
“The BoE was doing emergency bond-buying that’s technically identical to QE with one hand, while furiously raising the policy rate with the other,” said analysts at ANZ in a note.
“Monday’s market action will provide a test, not only for the survival of Truss’ low-tax vision, but also her political future.”
Sterling was quoted up 0.6% at $1.1240, but trading was sparse with little liquidity in Asia.
In equity markets, MSCI’s broadest index of Asia-Pacific shares outside Japan eased 0.5% and back toward last week’s 2-1/2 year low. Japan’s Nikkei shed 1.1% and South Korea 1.5%.
S&P 500 futures ESc1 edged up 0.5% after Friday’s sharp retreat, while Nasdaq futures NQc1 added 0.4%.
While the S&P is an eye-watering 25% off its peak, BofA economist Jared Woodard warned the slide was not over given the world was transitioning from two decades of 2% inflation to a time of something more like 5% inflation.
“$70 trillion of ‘new’ tech, growth, and government bond assets priced for a 2% world are vulnerable to these secular shifts as ‘old’ industries like energy and materials surge, reversing decades of under-investment,” he wrote in a note.
“Rotating out of 60/40 proxies and buying what is scarce – power, food, energy – is the best way for investors to diversify.”
INTERVENTION WATCH
A red-hot US inflation report last week has markets fully expecting the Federal Reserve to hike rates by 75 basis points next month, and likely by the same again in December.
A host of Fed policymakers are speaking this week, so there will be plenty of opportunity for hawkish headlines. The earnings season also continues with Tesla Inc, Netflix and Johnson & Johnson reporting, among others.
In China, the Communist Party Congress is expected to grant a third term to President Xi Jinping, while there could be a reshuffle of top economic roles as incumbents are near retirement age or term-limits. Read full story
In currency markets, the dollar remains king as investors price in U.S. rates peaking around 5%.
The yen has been particularly hard hit as the Bank of Japan sticks to its super-easy policy, while the authorities refrained from intervention last week even as the dollar sped past the 148.00 level to 32-year peaks.
Early Monday, the dollar was up at 148.62 yen and heading for the next target at 150.00.
The euro was holding at $0.9733, having put in a steadier performance last week, while the U.S. dollar index eased a fraction to 113.20.
The rise of the dollar and global bond yields has been a drag for gold, which was stuck at $1,646 an ounce.
Oil prices were trying to bounce after sinking more than 6% last week as fears of a demand slowdown outweighed OPEC’s plans to cut output.
Brent LCOc1 firmed 64 cents to $92.27 a barrel, while U.S. crude CLc1 rose 55 cents to $86.16 per barrel.
