Indices

Asian equity markets closed the day reflecting a blend of resilience and volatility across major indices. The Nikkei 225 (^N225) in Japan ended the session at 48.084,00, registering a daily decline of -1,02%. This pullback follows recent gains and signals a pause as investors digest higher-than-expected producer price data and shifting domestic political dynamics. In contrast, the SSE Composite Index (000001.SS) in China closed at 3.897,03, down -0,94%, reflecting cautious optimism and a steady recovery following the Golden Week holiday. The short-term micro-trend signals for both indices are flat, indicating that despite recent moves, there is no strong directional conviction as investors remain in a wait-and-see mode.

Stocks

Major sectoral shifts influenced trading strategies and sentiment today. In Japan, technology shares such as Advantest Corporation (6857.T) and Lasertec Corporation (6920.T) posted notable gains of over 6.9, reinforcing the sector’s leadership. However, semiconductor names like Tokyo Electron (8035.T) and Advantest also saw sharp intraday declines of up to -7.6, reflecting volatility tied to trade frictions and weakening demand signals. In China, Zijin Mining Group (601899.SS) outperformed, climbing 7.5 amid a rally in gold prices, while new energy and technology sectors, such as CATL (300750.SZ), saw sharp jumps of 9. Conversely, the electric vehicle segment—encompassing Geely Automobile, Li Auto, NIO Inc. (^NIO), Xpeng, and BYD—remained under pressure, with declines ranging from -5 to -9 as price wars and regulatory scrutiny weighed on the sector.

Economic News

In Japan, the Leading Economic Index for July registered 106.1, up 1.048, suggesting a slight improvement in forward-looking indicators. Industrial production in September posted a robust monthly gain of 4.1, but retail sales year-over-year in August fell to -1.1, highlighting ongoing consumer weakness. In China, the World Bank revised the 2025 GDP growth forecast upward to 4.8, reflecting improved short-term prospects. China’s foreign exchange reserves reached 3.2853 at the end of May after five consecutive months of growth, indicating macro-financial stability despite global uncertainties.

Economic Events

Key scheduled events could shape market direction in the near term. In China, investors are awaiting the release of Foreign Exchange Reserves (September) on October 9, with an estimated value of 3.31, providing insight into capital flows and external sector stability. In Japan, attention is focused on Bank of Japan communications, including a scheduled speech by BoJ’s Noguchi and the release of the BoJ Summary of Opinions. These events are anticipated to clarify monetary policy direction in the context of recent leadership changes and fiscal debates. Additionally, ongoing trade tensions and recent geopolitical incidents, such as the aerial encounter in the East China Sea, are likely to remain on investor radars.

Market Sentiment

Overall sentiment in Asia is mixed and cautious. The Nikkei 225’s recent rise underscores underlying optimism linked to pro-growth policy expectations and a rebound in the technology sector, but the prevailing flat short-term trend and volatile economic data temper this enthusiasm. In China, policy support, upward GDP revisions, and robust reserves have fostered cautious optimism; however, sector-specific headwinds—especially in electric vehicles—and external uncertainties persist. Investors are currently taking a wait-and-see approach, seeking further macroeconomic clarity and policy guidance before making decisive moves. This mood is reinforced by warnings from the IMF and JPMorgan Chase about potential market corrections, as well as ongoing vigilance from the Bank of Japan with regard to global trade risks.

Please note that the analysis is for informational purposes only and does not constitute financial advice. Users should conduct their own research.