Last week’s Jakota markets:
- Japan’s Nikkei 225 Index advanced 0.67% as U.S.-China tariff reduction agreement boosted investor sentiment, despite Japan’s GDP contracting 0.7% in Q1 2025
- South Korea’s KOSPI surged 1.9% amid eased trade tensions, with the won reaching a six month high against the dollar
- Taiwan’s TAIEX led regional gains with a robust 4.4% jump, propelled by strong buying in TSMC following the U.S.-China trade détente
- The JAKOTA Blue Chip 150 Index added 1.3%, highlighted by container shipping giant HMM’s 26.4% jump and Rakuten Group’s continued financial struggles
Japan
Japan’s stock market notched modest gains last week, with the Nikkei 225 advancing 0.67% amid improved investor sentiment following the easing of trade frictions between the U.S. and China. The bilateral agreement to reduce tariffs offered markets a welcome respite. Meanwhile, Japanese officials continued pushing for a comprehensive reassessment of American tariffs during ongoing bilateral trade negotiations, with particular emphasis on those impacting the automotive sector.
The yen experienced significant volatility, initially dropping sharply as investors moved away from safe haven assets before staging a recovery to finish essentially unchanged at approximately ¥145 against the dollar. This turnaround coincided with broader strength across Asian currencies, partially fuelled by market speculation that Washington might be pivoting towards a weaker dollar policy within the framework of current trade discussions.
Economic data revealed Japan’s economy contracted more severely than anticipated in 2025’s first quarter, with GDP shrinking at an annualised rate of 0.7% quarter-on-quarter, falling short of economists’ projections of a 0.2% contraction.
This decline, following a robust 2.4% expansion in the previous quarter, represents the first economic contraction in a year. Analysts attribute the pullback primarily to sluggish domestic consumption and diminished external demand, particularly from China. Growing uncertainty surrounding U.S. trade policies further dampened economic sentiment. Despite these headwinds, the Bank of Japan (BoJ), while downgrading its growth and inflation forecasts due to tariff concerns, has maintained that interest rate increases remain an option should economic and price developments proceed according to projections.
South Korea
South Korean equities posted solid gains this week, with the KOSPI rising 1.9% as reduced tariff anxieties stemming from the Washington-Beijing trade accord bolstered risk appetite among investors. Concurrently, the won climbed to its strongest position against the dollar in six months.
Taiwan
Taiwan’s stock market delivered impressive performance this week, with the TAIEX surging 4.4% as investors aggressively purchased TSMC and other electronics shares following announcement of a substantial 90 day tariff reduction between the U.S. and China. The agreement, reached over the weekend, significantly boosted market sentiment and fuelled risk-on momentum.
JAKOTA Blue Chip 150 Index
The JAKOTA Blue Chip 150 Index registered a 1.3% increase this week, with gains distributed across half of its 150 constituent stocks.
HMM, the biggest Korean container carrier, dominated the index’s performance with a 26.4% surge after reporting impressive first quarter earnings. The nation’s leading container carrier recorded a 23% increase in revenue to ₩2.85 trillion, while net profit soared 52% year-on-year to ₩740 billion, benefitting from sustained shipping demand and improved operating margins.
Conversely, Rakuten Group, the Japanese e-commerce conglomerate, emerged as the index’s poorest performer this week after reporting its 19th consecutive quarterly loss.
The company disclosed a net loss of ¥73.47 billion for the quarter ending March, deteriorating from ¥42.39 billion in the same period last year and considerably worse than analysts’ expectations of ¥40.38 billion. Escalating financing costs coupled with persistent challenges in its wireless telecommunications division significantly impacted the bottom line.
During a Wednesday press conference, CEO Hiroshi Mikitani stated that Rakuten will prioritise improving communication quality and boosting brand awareness to attract new users. The firm intends to deploy an additional 10,000 base stations by year end 2025, with the objective of eliminating coverage gaps and alleviating network congestion in densely populated areas.
