Japanese Equities Jump Post Holiday, Regional Markets Mixed

Asian markets are trading higher today, with Japanese stocks leading the rally. The Nikkei 225 and the Topix both gained over 2%, buoyed by a weaker yen which supports exporters. MSCI’s Asia-Pacific gauge rose by up to 1%, recovering from last week's losses. China & Hong Kong markets are little changed today, as the market awaits data due out on Thursday. US equity futures are modestly higher, and US 10-year Treasury futures are flat Oil prices remain around $80 amid concerns about potential Iranian attacks on Israel, which also led Fitch Ratings to downgrade Israel’s debt. Market focus will now shift to upcoming US inflation data to assess its impact on Federal Reserve policy and potential rate cuts. Meanwhile, Chinese regulators are taking measures to cool down domestic bond market rallies.

• Japanese equities have recovered to levels seen before the sharp 12% drop on August 5, with the Nikkei 225 up 2.50% with the market rebounding after a long weekend, supported by a weaker yen, which benefited exporters like automakers and tech firms. Technology stocks, including Tokyo Electron, gained following a boost in U.S. semiconductor stocks. Despite the recent recovery, both the Nikkei 225 and Topix are still down around 9% since the end of July. On Monday there were comments from an ex-BoJ board member suggesting that the BoJ may not raise rates again this year, due to the impact it has had on the markets. The Topix is 1.85% higher today, with Banks leading the way.
• South Korea has erased early gains, with the KOSPI now down 0.10%, while the KOSDAQ is off 1.65%. The market showed mixed performance among major stocks, with Samsung Electronics up 0.70% and SK hynix gaining 2.00%, benefiting from the recent strength in U.S. AI chip stocks like Nvidia. However, key battery makers, including LG Energy Solution and Samsung SDI, saw declines of 1% and 2%, respectively. Investors are cautious as they await critical U.S. economic data, including the consumer price index and retail sales figures, which could provide further direction for the global markets.
• Taiwan equities are slightly lower today, the Taiex has been swinging between gains and losses. TSMC is also unchanged today underperforming other semiconductors names in the region. We have seen the past two sessions of inflows into Taiwan's markets, with the past 5 session now seeing a slight inflow, ending weeks of heavy selling by foreign investors.
• Australian equities are slightly higher today, there has been some tier 2 data out with Consumer Confidence rising to 2.8% in August to 85.00 from 82.7 in July, wages rose to 4.1% in 2Q slightly beating estimates at 4%, while we also had NAB business surveys, with confidence in July dropping to 1 from 3, while conditions rose to 6 from 4. The ASX 200 is 0.10% higher. In New Zealand, the NZX50 is 0.20%.
• Asia EM is mixed today, with Malaysia's KLCI down 0.11%, Thailand SET is 0.25% lower, India's Nifty 50 is 0.12% lower, while Singapore's Straits Times is 0.85% higher, Philippines PSEi is 0.80% higher & Indonesia's JCI 0.75% higher