ASIA STOCKS: Asian Equities Mostly Higher Although Japanese Equities Lag

Asian equities are mostly higher as reciprocal US tariffs appeared weeks away from implementation, easing immediate concerns. Australian, South Korean & New Zealand stocks are higher, Japanese equities are lower now with the Nikkei trading down 0.50%, while Hong Kong futures pointed to a higher open. While the Nasdaq Golden Dragon Index rose 1.20% overnight, signaling positive sentiment.

• Asian defense stocks declined after Trump proposed a three-way US-Russia-China deal to halve defense spending. South Korean defense firms like HD Korea Shipbuilding (-3.2%) and Hanwha Aerospace (-2.1%) fell, while Japanese stocks like IHI (-2.8%) and Mitsubishi Heavy (-1.2%) also declined.
• Elsewhere, KKR is considering investing in Nissan after its merger talks with Honda failed. Key Asian data releases include South Korea’s unemployment rate which showed the employment rate dropping to 2.9% vs 3.2% expected, while shortly we have Malaysia’s GDP, and India’s wholesale prices. In commodities, gold continued rising toward record highs, while oil remained steady amid uncertainty over Russian supply risks.
• Overnight, US equities rose, with the NASDAQ up 1.50% & the S&P 500 up 1%, US equity futures are little changed so far today. In data US inflation data was mixed, with PPI higher than expected, but components feeding into the Fed’s preferred PCE gauge suggesting softer inflation.