Equities Mixed, Higher Wages & Stronger Yen Hurts Japan Equities

Asian equities markets are mixed as Japanese equities opened higher but turned negative due to yen strength following reports of Toyota meeting union demands to raise wages, causing speculation about a potential BoJ exit from NIRP. In South Korea, efforts to eliminate the "Korea Discount" are highlighted, with the Kospi just 0.05% higher; Taiwan plans measures to prevent irrational buying, and its equity market is unchanged after being up as much as 1.00%. Australian equities are slightly higher, with the ASX200 up 0.16%, while New Zealand's market closes down 0.17%. In Southeast Asia, Singapore equities are up 0.60%, Indonesia trades 0.30% higher after a two-day break, the PSEi in the Philippines is the top performer, up 1.30%, and Malaysia is the worst performer, down 0.96%.

• Japanese equities opened higher this morning but turned negative after strength in the yen. The yen has been strengthening after it was reported that Toyota will meet the union's demands to raise wages, including a bonus of 7.6 months of workers' salaries. It should be noted that Jiji stated that the BoJ would exit NIRP if this year's wage gains were significantly above last year's 3.8%. Since Toyota's announcement, multiple other firms have agreed to raise wages. The BoJ's decision to refrain from purchasing ETFs despite a market decline is fueling speculation that the bank might cease such acquisitions to enhance market health by improving liquidity and reducing price distortion, signaling a potential shift toward policy normalization. Currently, the Topix is down 0.50%, while the Nikkei 225 is down 0.40%.
• South Korean Financial Services Commission Vice Chairman Kim Soyoung said on Tuesday the importance of eliminating the "Korea Discount" by aiming to boost corporate valuations through initiatives encouraging retail investors and companies to utilize equities for wealth creation and capital, with plans to potentially ease taxes on dividend income and upgrade capital markets. Equities markets are mostly unchanged today with the Kospi just 0.05% higher, the top performer has been Samsung electronics which increased 0.70%
• Taiwan is looking to implement measures, such as financial inspections and heightened scrutiny on new ETFs, to prevent irrational buying, along with tighter regulations on marketing and ad campaigns by Internet influencers. The Taiwan equity markets are off earlier highs and the Taiex is now unchanged after being up as much at 1.00%
• Australian equities are slightly higher today, with household spending data showing a decline of 0.3% for the month, well below the prior month's gain of 3.1%. Financials are the top-performing sector, followed by consumer discretionary stocks, offsetting losses in miners. While China has announced earlier that they would lift the tariff imposed on Australian wine, with Treasury Wine Estate trading up 4.00% after the announcement. The ASX200 is 0.16%
• Elsewhere in SEA, NZ equities closed down 0.17% after food price data showed the smallest annual price jump since May 2021. Singapore equities are up 0.60%, Indonesia is back for their two-day break and is trading 0.30% higher and the top performer in the region in is the PSEi up 1.30%, while Malaysia is the worst performer in the region, down 0.96%.