Asian Equities Mixed, Market Cautious Ahead Of US Reopening

Asian markets are trading mixed today, Japanese equities led the gains in Asia, supported by a steady yen, Korean equities are little changed this morning with the won weakened following August inflation data showing the slowest price increase since 2021. Chinese markets fluctuated amid concerns over economic troubles, with weak factory activity data emphasizing the need for more government stimulus. US equity futures have slipped ahead of Wall Street's reopening after the Labor Day holiday. Traders are cautious ahead of the US jobs report, which could influence Federal Reserve policy expectations, we have seen a bit of a rotation out of tech stocks and into defensive stocks, as seen by outflows from tech heavy South Korea & Taiwan markets.

• Japan's equities are higher today, buoyed by a steady yen after its recent decline against the dollar. Despite the yen's weakness over the past week, it stabilized, with analysts predicting it will remain weak due to the significant interest rate differential between Japan and the US. The broader market outlook is cautious, as economic challenges in China and global uncertainties, particularly around US monetary policy, continue to weigh on sentiment. The Topix is 0.50% higher, Bank stocks are leading the way higher with the Topix Banks Index up 1.60%, Nikkei is 0.20% higher.
• South Korean equities are trading unchanged to slightly higher today, large-cap ex tech stocks are the top performers. The rotation out of high growth tech stocks continue with foreign investors slightly better sellers so far today, while buying financials. The Kospi is 0.25% higher, while the Kosdaq is unchanged.
• Taiwan equities are slightly higher today, local tech stocks are holding up a bit better than other markets with TSMC is currently trading 0.10% higher while Hon Hai is 1.65% higher, the BBG Asia semiconductor Index is 0.40% lower.
• The Australian equity market opened little changed today, gains in Financials have been offset by declines in the mining and consumer sectors. Market sentiment is cautious ahead ahead of US equities re-opening later today. Iron ore prices dropped sharply by 4% to $96.40 per tonne, driven by concerns over China's slowing construction activity and ongoing stress in its real estate sector, which has put pressure on Australian miners. The ASX is currently 0.14% lower, New Zealand equities are trading similar with the NZX50 down 0.15%
• Asian EM equities are mixed with Indonesia's JCI down 0.50%, Malaysia's KLCI is 0.12% lower, Singapore's Straits Times is 0.50% higher while Philippines PSEi is unchanged.