Last week’s Jakota markets:
- Japan’s Nikkei 225 surged 3.2%, with investors recalibrating rate hike expectations after the BoJ lowered growth projections amid persistent labour shortages
- South Korea’s KOSPI posted a modest 0.5% rise amid careful investor sentiment, with April inflation holding at 2.1% for the fourth consecutive month above target
- Taiwan’s TAIEX index led regional gains with a 4.6% jump, powered by the electronics sector following strong U.S. tech earnings despite a manufacturing PMI drop
- The JAKOTA Blue Chip 150 Index advanced 3.5% with Toyota Industries soaring 25.8% on buyout speculation and Hanwha Ocean tumbling 12.1% after a major stake sale
Japan
Japan’s stock market advanced this week, with the Nikkei 225 gaining 3.2%. The Bank of Japan (BoJ) kept interest rates unchanged and trimmed its growth and inflation forecasts, fuelling speculation about a delayed rate hike. Improving global trade sentiment provided a modest boost to risk appetite, though U.S.-Japan trade talks remain in early stages with both sides “still seeking common ground,” Prime Minister Shigeru Ishiba said.
The BoJ maintained its policy rate at 0.5% while lowering growth and core inflation projections for fiscal 2025 and 2026, citing economic weakness and sluggish underlying price pressures. Governor Kazuo Ueda flagged “extremely high uncertainty” from global trade and policy dynamics, with downside risks to both growth and prices.
With the timeline for inflation to stabilise around the 2% target now extended, investors recalibrated expectations for the next rate increase, anticipating delays but not a reversal in policy normalisation. The BoJ reiterated that further tightening remains possible if its baseline scenario holds. Despite global headwinds, the central bank maintained confidence in Japan’s domestic wage-price cycle, supported by persistent labour shortages.
The Au Jibun Bank manufacturing PMI showed continued deterioration in factory activity during April, underscoring weakness in the industrial sector. Separate data revealed that both industrial production and retail sales fell short of expectations in March, adding to signs of softening momentum across Japan’s economy.
South Korea
South Korea’s stock market edged higher this week, with the KOSPI rising 0.5%. Institutional buying provided support, though investors remained cautious while assessing the impact of shifting U.S. tariffs on major companies’ earnings.
Bank of Korea (BOK) Deputy Governor Kim Woong said inflation is likely to remain around 2% in the near term, as easing global oil prices and subdued demand are balanced by upward pressure from the won-dollar exchange rate. His remarks followed April’s CPI reading of 2.1% year-over-year, marking the fourth straight month above the central bank’s target.
“Inflation remains broadly stable,” a government official said, adding that authorities will closely assess the inflation outlook in the upcoming May economic forecast. He noted rising uncertainty surrounding U.S. tariff policies as a key risk factor.
Taiwan
Taiwan’s stock market rallied this week, with the TAIEX climbing 4.6%, driven by gains in the electronics sector. Sentiment improved after stronger than expected earnings from U.S. tech giants Meta Platforms and Microsoft, which helped ease concerns over AI demand despite ongoing tariff disruptions.
Taiwan’s manufacturing sector fell back into contraction in April, ending a two month expansion streak, according to the Chung-Hua Institution for Economic Research. The PMI dropped 5.3 points from March to 48.9, as tariff related pressures from U.S. policy weighed on industrial output.
JAKOTA Blue Chip 150 Index
The JAKOTA Blue Chip 150 Index added 3.5% this week. Among its 150 constituents, 114 stocks posted gains.
Toyota Industries, a Japanese company specialising in material handling equipment, automotive components and textile machinery, emerged as the top performer, rallying 25.8%. The surge followed Toyota Motor’s announcement that it was considering a potential buyout of the key parts supplier, which plays a crucial role within the broader Toyota Group.
Hanwha Ocean, one of South Korea’s largest shipbuilders, tumbled 12.1%, leading the index’s worst performers after Korea Development Bank sold a 4.2% stake in a pre market block trade worth more than ₩1 trillion ($695.8 million). The state run lender sold 13 million shares at ₩81,650 apiece, an 8.6% discount to Monday’s close.
The transaction, led by Korea Investment & Securities and UBS for domestic and overseas investors respectively, reduced KDB’s holding to 15.3% from 19.5%, though it remains Hanwha Ocean’s second largest shareholder.
