Equities Mixed, Japan Wages Rise, SK Look to Close "Korea Discount"

Asian equities markets are mixed as Japanese stocks initially rose but turned negative due to yen strength following reports of Japanese companies raising wages, triggering concerns about the Bank of Japan potentially exiting NIRP soon. Meanwhile, Taiwan plans financial inspections to prevent irrational buying; Australian equities are slightly higher, with financials leading amid a household spending decline, and the overall Bloomberg APAC Developed Markets Index is up 0.14%.

• 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 0.40%, while the Nikkei 225 is down 0.50%.
• 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; the Kospi is up 0.30% today.
• 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 Taiex is up 10.80% over the past month and up 0.45% today.
• 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. The ASX200 is up 0.25%.
• Elsewhere in SEA, NZ equities are lower today after food price data showed the smallest annual price jump since May 2021. Singapore equities are up 0.41%, while Malaysia is the worst performer in the region, down 0.75%.