Source: Sharecast
Japan’s exports fell 2.6% year on year in July, marking their steepest decline in more than four years and exceeding the contraction expected in a Reuters poll.
Stephen Innes, managing partner at SPI Asset Management, said the global backdrop was weighing heavily.
“Global markets buckled midweek under the weight of a US tech-driven rout, a reminder that when the generals stumble, the infantry rarely holds,” he said.
“Wall Street’s stumble bled across time zones, leaving Asia heavy and Europe unable to shake the funk.”
Markets mixed as investors watch trade data, central bank decisions
In Tokyo, the Nikkei 225 shed 1.42% to 42,930.00, with technology stocks leading losses.
SoftBank Group fell 7.14%, extending its slide after announcing a $2bn investment in Intel on Tuesday.
Mitsui Mining and Smelting fell 6.25% and Fujikura lost 5.66%.
The broader Topix slipped 0.57% to 3,098.91.
Mainland Chinese stocks bucked the regional downtrend - the Shanghai Composite gained 1.04% to 3,766.21, with Deluxe Family Co, Hunan Huasheng and Kunshan Kersen Science & Technology all rising more than 10%.
The Shenzhen Component added 0.89% to 11,926.74.
Hong Kong’s Hang Seng Index rose 0.21% to 25,176.00, supported by gains in technology and healthcare stocks.
Sunny Optical Technology surged 9.41%, Semiconductor Manufacturing International Corp rose 3.4% and WuXi Biologics climbed 2.89%.
In South Korea, the Kospi 100 retreated 0.56% to 3,176.44, with LS Industrial Systems falling 5.98%, KakaoPay slipping 4.74% and Hyundai Engineering & Construction declining 4.39%.
Australia’s S&P/ASX 200 advanced 0.25% to 8,918.00, with Platinum Asset Management up 8.22%, Stockland Corporation gaining 6.99% and Nine Entertainment Co rising 4.15%.
Across the Tasman Sea, New Zealand’s S&P/NZX 50 outperformed, adding 1.1% to 13,071.30.
Synlait Milk rose 4.92%, Spark New Zealand gained 3.63% and Westpac Banking Corporation was up 3.57%.
In currency markets, the dollar was last down 0.07% on the yen to trade at JPY 147.56, while it strengthened 0.32% against the Aussie to AUD 1.5545, and gained 1.28% on the Kiwi, changing hands at NZD 1.7186.
“The dollar’s been quietly flexing this week, not with the drama of a breakout but with the kind of steady bid that sneaks up on you,” Innes noted.
“Position squaring ahead of Jackson Hole explains part of it, but there’s also that sense of the greenback reclaiming a sliver of its old safe-haven swagger.”
He added that New Zealand was the real mover.
“The RBNZ didn’t just resume its rate cut cycle with 25 basis points; it laid down a marker.
“The split vote - two members even pushing for 50 basis points - and the explicit signal of two more cuts by year-end was the tell.
“That’s the canary in the coal mine moment.”
Oil prices extended gains, with Brent crude futures last up 0.82% on ICE at $66.33 per barrel, and the NYMEX quote for West Texas Intermediate rising 1.04% to $63.00.
Exports drop sharply in Japan, RBNZ cuts rates in split decision
In economic news, Japan’s exports recorded their sharpest fall in more than four years in July, as the impact of US tariffs weighed heavily on the country’s trade outlook.
Government data showed exports fell 2.6% from a year earlier, the biggest monthly drop since February 2021 and larger than market expectations of a 2.1% decline.
It marked a third consecutive month of contraction, following a 0.5% fall in June.
Shipments to the United States dropped 10.1%, with automobile exports slumping 28.4% and auto parts down 17.4%.
In volume terms, however, car exports were down just 3.2%, suggesting price cuts and other adjustments helped soften the blow from tariffs.
Washington imposed 25% duties on autos and components in April, later striking a July deal with Tokyo that lowered rates to 15% in return for a $550bn Japanese investment pledge.
Despite the reduction, the levy remained far above the original 2.5%, keeping pressure on automakers.
Exports to China also slipped, down 3.5%.
Imports declined 7.5% year-on-year, less than the 10.4% drop economists had forecast, leaving Japan with a trade deficit of JPY 117.5bn against expectations for a surplus.
In New Zealand, the Reserve Bank cut its cash rate by 25 basis points to 3%, the lowest in three years, in a split decision.
Policymakers cited weak economic momentum, with households and businesses holding back amid high prices, a soft labour market and global uncertainty.
The bank said inflation was still on track to stabilise around its 2% target, but further cuts remained possible.
Innes said the impact on markets was immediate.
“The kiwi paid the price, off more than 1% against the dollar, dragging NZD-USD toward 0.5800 while AUD-NZD vaulted above 1.1050.
“Commodity peers - AUD, NOK - wobbled in sympathy as tech stocks and oil added to the gloom, while JPY and CHF quietly gathered the haven bid.”
Meanwhile, China’s central bank left its benchmark lending rates unchanged, as expected.
The one-year loan prime rate was held at 3% and the five-year at 3.5%, steady for a third consecutive month after a reduction in May.
Official data showed consumer prices remained subdued, with annual inflation at 0% in August, after 0.1% in July and minus 0.1% in June.
Reporting by Josh White for Sharecast.com.