Last week’s Jakota markets:
- Japan’s Nikkei 225 rose 1.68% after the BoJ maintained its cautious stance and 0.5% rate, while Governor Ueda flagged trade policy risks amid inflation that topped forecasts at 3%
- South Korea’s KOSPI posted a robust 3% gain, led by tech stocks, despite persistent concerns over President Trump’s broad tariff plans and ahead of the March 31 resumption of short selling
- Taiwan’s TAIEX added 1.1% as electronics stocks rallied on perceived dovish Fed signals, while the central bank adopted a more cautious 2025 growth outlook than the government
- The JAKOTA Blue Chip 150 Index jumped 2.8% with LG Chem surging 13% on upbeat earnings outlook and Korea Zinc tumbling 7% amid both profitability concerns and U.S. scrutiny of its potential acquisition
Japan
Japan’s stock market advanced modestly last week, with the Nikkei 225 climbing 1.68%. The Bank of Japan’s (BoJ) widely expected decision to hold rates steady helped temper market uncertainty and bolster sentiment. The central bank maintained a cautious stance, assessing the potential economic impact of heightened U.S. tariffs.
At its March 18–19 policy meeting, the BoJ held its short term rate at 0.5%, aligning with market expectations, while preserving its economic and inflation outlook. The bank indicated it would implement tighter monetary policy should inflation develop according to forecasts, with Governor Kazuo Ueda specifically highlighting trade policy uncertainties as a primary concern. Investors continued to anticipate a measured pace of rate increases.
Recent economic indicators reinforced the case for additional tightening measures. Japan’s core consumer price index (CPI) rose 3% year-over-year in February, surpassing consensus projections of 2.9%, though easing from January’s 3.2% figure.
The BoJ remains vigilant regarding the interplay between wages and prices, a critical element shaping inflation expectations. In its policy statement, the central bank identified two significant factors likely to sustain elevated inflation through fiscal 2025: persistent high rice prices and the diminishing effect of government initiatives that have previously helped contain inflationary pressures.
South Korea
South Korea’s equity market posted robust gains this week, with the KOSPI surging 3%, primarily fuelled by strong performance in tech stocks. The market rally persisted despite ongoing worries surrounding U.S. President Donald Trump’s proposed broad tariff initiatives.
Separately, the scheduled full reinstatement of short selling practices in South Korea on March 31 is expected to facilitate the return of foreign capital to domestic equities.
South Korean authorities implemented a short selling ban in November 2023 after discovering multiple violations of naked short selling regulations by international investment firms. With restrictions set to expire next Monday, financial regulators have emphasised stronger oversight and enhanced safeguards.
Taiwan
Taiwan’s stock market rebounded this week, with the TAIEX gaining 1.1%. The upturn was primarily driven by strength in electronics shares as investors reacted favourably to what many perceived as a dovish Federal Reserve stance. Nevertheless, lingering concerns regarding President Donald Trump’s policy positions continued to dampen market enthusiasm, contributing to broader economic uncertainty.
Taiwan’s central bank revised downward its 2025 GDP growth projection to 3% from its previous December estimate of 3.13%, indicating a more conservative outlook than official government forecasts. By contrast, the Directorate General of Budget, Accounting and Statistics (DGBAS) projected in late February that the economy would expand by 3.14% next year.
JAKOTA Blue Chip 150 Index
The JAKOTA Blue Chip 150 Index jumped 2.8% this week, with 115 of its 150 constituent stocks registering gains.
LG Chem, South Korea’s largest chemical producer, led advances on the JAKOTA Blue Chip 150 Index, surging 13% amid optimistic first quarter earnings projections.
IBK Investment & Securities forecasts the company’s operating profit will recover to a ₩191 billion ($144 million) surplus, substantially exceeding market expectations of ₩61.5 billion. Analysts anticipate narrower losses in the firm’s petrochemical division as high value added products maintain robust profit margins and restructuring initiatives for general purpose products begin yielding results.
Additionally, sales in India – a key export market for the company – are projected to increase in the year’s second half as new Bureau of Indian Standards (BIS) regulations take effect. The company’s strategic pivot towards premium offerings, including electric vehicle charging cables, is also expected to enhance profitability metrics.
Korea Zinc, the world’s largest supplier of non ferrous metals, tumbled 7%, reversing its status as the previous week’s top performer on the JAKOTA Blue Chip 150 Index. The selloff came after the company reported fourth quarter earnings that highlighted intensifying margin pressures.
The metals producer reported consolidated quarterly revenue of ₩3.44 trillion ($2.38 billion), representing a 42.6% increase from the prior year. However, operating profit declined 32.9% to ₩132.8 billion, as depressed non ferrous metal prices, reduced smelting treatment charges and currency fluctuations compressed margins amid broader economic slowdown.
Compounding investor concerns, the U.S. State Department confirmed this week it is closely monitoring private equity firm MBK Partners’ bid to acquire Korea Zinc. The scrutiny follows warnings from Republican Rep. Zach Nunn, who argued the deal could increase China’s influence over critical mineral supply chains, raising risks of economic coercion and technology leakage.
