Nikkei 225

Rate Increases Have Limited Impact on Japanese Borrowers' Credit Quality, S&P Says

Increasing interest rates will not have a significant effect on Japanese borrowers' creditworthiness, although repayment burdens could intensify if the rise in rates continues, S&P Global Ratings said in a Tuesday release.The rating agency expects limited impact on repayment capacity from higher interest rates as residential mortgage-backed securities (RMBS) are usually backed by fixed-rate housing loans, S&P said.However, rate increases could heighten total borrowing, especially under increased real estate prices, S&P said.The spike in housing prices is likely due to increased employment costs and a sustained rise in imported material prices, the rating agency said.Still, S&P expects that even under the most severe stress scenario, tranches to be downgraded would only have a 17% share of all rated RMBS transactions and still lead to ratings of A+ or higher.

Bank of Japan Holds Rates, Cuts Growth Outlook, Raises Inflation View

Citing heightened inflation risks but also a slowing economy, in a mixed decision the Bank of Japan kept its key interest rate unchanged, the central bank disclosed Tuesday.The Bank of Japan held its short-term policy rate at 0.75% by a 6-3 vote, leaving the rate unchanged since last December.Bank of Japan Governor Kazuo Ueda said policymakers need more time to assess how the Persian Gulf war and the closure of the Strait of Hormuz will affect prices and the economy.Demonstrating the impact of higher oil prices, the central bank forecast that the nation's consumer price index-core (CPI-core), that strips out fresh food prices, will rise 2.8% in fiscal 2026 (started April 1), up from the 1.9% estimate in January.In addition, the Bank of Japan lowered its forecast for gross domestic product (GDP) growth to 0.5% for the fiscal year, down from 1% in its the previous outlook.Until recent years, the Bank of Japan has struggled not with inflation but near-deflation, and also extended sluggish economic growth, resulting in what some critics termed "lost decades."In recent seasons, central bank officials have reiterated they want to keep demand for labor strong enough that real wages rise, thus allowing more consumption and overall economic expansion.Until today's forecast, the Bank of Japan also issued sanguine inflation forward estimate, that the CPI-core would recede to within the bank's 2% target in fiscal 2026.In fact, in March, Japan logged a modest 1.8% increase in the CPI-core on year, reported the Statistics Bureau.But going forward, with higher oil prices, and the weakest yen vs. the US dollar in 35 years, the Bank of Japan is now forecasting that inflation will rise above the central bank's target.Japan's central bank next meets on April 27-28."We continue to believe there's a chance that the BoJ may hike on 28 April," said ING Think, an rm of the Dutch investment house. "Board members' concerns about higher inflation expectations are likely to increase as real interest rates remain deeply negative."

Japan Stocks Fall as BOJ Holds Rates, Flags Middle East Uncertainty

Japanese equities closed lower on Tuesday after the Bank of Japan held its policy rate at 0.75% and flagged heightened uncertainty around the economic outlook.The Nikkei 225 fell 1.02%, or 619.90 points, to close at 59,917.46.The decision came with dissent from three board members who called for a rate increase, reinforcing expectations of a potential policy shift. Governor Kazuo Ueda said the likelihood of achieving the bank's forecasts has weakened due to uncertainty tied to the Middle East conflict.He said risks are skewed both ways, with downside pressure on growth and upside risks to inflation, particularly in fiscal 2026, making it difficult to assess the duration and impact on the economy and prices.In other economic news, Japan's unemployment rate rose to 2.7% in March from 2.6%, as the number of employed fell to 68.15 million and jobless increased to 1.86 million.On the corporate front, Shares of Denso (TYO:6902) fell about 3% after it withdrew its proposal to acquire a stake in ROHM (TYO:6963), citing lack of support and limited value upside.Shares of Nissan Motor (TYO:7201) rose about 4% after it forecast a narrower fiscal 2025 loss, with loss per share seen at 157.42 yen and net loss at 550 billion yen alongside slightly higher sales.Shares of Idemitsu Kosan (TYO:5019) gained about 3% after a report said it will supply Vietnam with around 4 million barrels of crude via routes bypassing the Strait of Hormuz.

BOJ Holds Rates as Three Members Push for Hike

The Bank of Japan kept interest rates unchanged but faced dissent from three board members who called for a hike, highlighting concern over inflation risks linked to the Middle East conflict.The central bank held its short-term policy rate at 0.75% at the end of a two-day meeting. Board members Hajime Takata, Naoki Tamura and Junko Nakagawa proposed raising rates to 1%.Governor Kazuo Ueda said policymakers need more time to assess how the Middle East situation will affect prices and the economy.He said Japan's economy is recovering moderately, though with some weakness, and expects growth to slow in 2026. Ueda also flagged the risk of inflation overshooting, which could weigh on economic activity.

Market Chatter: Japan IPO Market Will Stay Subdued as AI Stocks Draw Investors

Japan's IPO market will remain under pressure despite strong debuts from a sake brewer and a pet food maker, as investors continue to favor AI-related stocks, Reuters reported Tuesday.Shares of Umenoyado Brewery (TYO:559A) rose about 75% on their first trading day, while Inuneko-Seikatsu (TYO:556A) gained more than 30% after listing. The gains contrast with broader weakness, with many new listings trading below their offer prices this year, the report said.Investor focus on AI leaders such as SoftBank Group (TYO:9984) and Advantest (TYO:6857) has diverted flows away from smaller, domestically focused IPO candidates. Stricter listing standards from the Tokyo Stock Exchange are also weighing on activity, with companies facing tougher valuation thresholds in coming years, according to the report.The number of IPOs in Tokyo will likely fall about 20% this year from 2025 levels, as retail investors prioritize short-term gains in large-cap technology stocks over new listings, the report said.(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

Market Chatter: Japan Life Insurers Will Boost Domestic Bonds as Yields Rise

About half of Japan's major life insurers will increase domestic bond holdings in fiscal 2026 as long-term yields rise, a Nikkei survey showed Tuesday.Five of 10 insurers plan to add Japanese government bonds, up from four a year earlier, with 20-year yields around 3.3%. The narrowing gap with U.S. yields and hedging costs are reducing the appeal of foreign debt, with only Nippon Life Insurance and Meiji Yasuda Life Insurance planning increases, according to the report.Meiji Yasuda Life Insurance will buy about 1 trillion yen of ultra long-term bonds, while Japan Post Insurance (TYO:7181) will raise holdings for the first time in nearly two decades, the report said.Total domestic bond holdings across the 10 insurers will still fall by about 1.5 trillion yen, a smaller drop than a year earlier. All plan to increase allocations to alternative assets such as private credit, according to the report.(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

Bank of Japan Keeps Benchmark Interest Rate Steady at 0.75%

Japanese Stocks Open Muted Ahead of Rate Decisions, Tech Earnings as US-Iran Talk Progress Stalls

Japanese stocks showed little movement at open ahead of the Bank of Japan's rate decision later Tuesday, as investors turned their focus to tech earnings later this week amid a lack of geopolitical progress.The Nikkei 225 opened in negative territory, slipping marginally at 60,531.78.This week, central banks. including the U.S. Federal Reserve, the European Central Bank, and those in Japan, the UK, and Canada, are all scheduled to set rates, collectively influencing monetary policy for roughly half of the global economy.With no significant breakthroughs on the geopolitical front, investors have shifted their attention to earnings reports from a group of tech giants, including Alphabet, Microsoft, Amazon, and Meta, all due on Wednesday, followed by Apple on Thursday.Meanwhile, the White House stated that U.S. officials are discussing Iran's latest proposal but continue to maintain red lines regarding any potential deal to end the eight-week conflict.

Market Chatter: Japan to Issue Additional Guidance on Takeover Rules

The Japanese government plans to issue new takeover guidance, letting target companies weigh economic security and input from employees and partners, not just the bid price, when assessing offers, Nikkei Asia reported Tuesday.The Ministry of Economy, Trade and Industry (METI) will add a practical Q&A section to its 2023 guidelines as early as July, emphasizing that a high purchase price alone does not necessarily make a deal desirable, the news daily said.Under the new guidance, corporate value includes worker and partner contributions, plus economic security benefits like resilient supply chains and tech leak protection, the publication said.METI aims to correct the misconception that boards must accept the highest offer or risk litigation, clarifying that rejection or remaining independent is acceptable, the report said.While the 2023 guidelines warned against overemphasizing hard-to-measure value, the new Q&A stresses that opposition from employees or partners, or concerns over an acquirer's tech leaks, can legitimately hurt corporate value, the report said.(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

Japan's Unemployment Rate Ticks Up to 2.7% in March

Japan's unemployment rate inched up to 2.7% in March compared with the previous month's 2.6%, according to government data released on Tuesday.The data showed that the number of employed decreased slightly to a seasonally adjusted 68.15 million from 68.27 million in February, while the number of jobless people increased to 1.86 million from 1.85 million the prior month.

Market Chatter: Japan Faces Risk of Missing on New Drugs Due to US Pricing Model

Japan may miss out on breakthrough drugs because a U.S. pricing model threatens to link American drug costs to lower Japanese prices under the most favored nation (MFN) plan, Nikkei reported on Tuesday.Under the plan, the U.S. would reference prices from countries, including Japan, for Medicare and Medicaid, though companies could avoid this by not launching products in Japan, the news daily said.This could lead pharmaceutical firms to delay or skip entering the Japanese market, while Japan might face upward pressure on drug prices and higher social insurance costs, the publication said.Industry groups are urging Japan to reassess its pricing rules to align innovative drug prices with international levels and maintain them during patent periods, the report said.(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

Japan's Unemployment Rate Rises to 2.7% in March

Earnings Season, Tehran Proposal Lift Asian Stock Markets

Asian stock markets largely gained ground Monday on strength in tech issues, and on media reports that Tehran has floated a proposal to reopen the Strait of Hormuz. A generally good industrial profits report from Beijing also boosted sentiments.Shanghai and Tokyo finished in the green, while Hong Kong edged lower. Other regional exchanges mostly finished higher.In Japan, the Nikkei 225 opened evenly but rose to the close, gaining 1.4% to strike a fresh all-time high. Strong earnings results offset a risk-off mood.The benchmark Nikkei 225 index rose 821.18 to 60,537.36, the first-ever close above the 60,000-milestone, although losing issues outnumbered gainers 129 to 94.Leading the upside was industrial robot maker Fanuc, up 16%, while Chugai Pharmaceutical declined 15.8%, with both moves following earnings reports.In Hong Kong, the Hang Seng Index finished off 0.2%, undercut by property issues.The broad gauge Hang Seng fell 52.42 to 25,925.65, as losing issues outnumbered gainers 53 to 36. The Hang Seng TECH Index gained 0.8% on the day, while the Mainland Properties Index fell 0.7%.Leading the upside was Semiconductor Manufacturing International, gaining 6.1%, while Sinopharm declined 3.8%.On the mainland, the Shanghai Composite rose 0.2% to 4,086.34.In economic news, industrial profits in China rose 15.8% on the year in March, largely on the back of private-sector enterprises, said the National Bureau of Statistics. The agency's survey is limited to companies with more than $2.9 million a year in revenue.On the other regional exchanges, the South Korean KOSPI rose 2.2%; the Taiwan TWSE advanced 1.8%; the Australian ASX 200 declined 0.2%; the Singapore Straits Times Index fell 0.6%, and the Thai Set rose 1.6%. In late trading in Mumbai, the Sensex was up 0.8%The MSCI All Country Asia Pacific Index rose 1.2% on the day.

Japanese Financial Institutions' Appetite for US Private Credit to Continue, Fitch Says

Japanese financial institutions will continue to favor higher-yielding assets abroad, including US private credit, Fitch Ratings said in a recent release.The preference for higher-yielding overseas assets will remain despite improved yields on Japanese assets, the rating agency said.Recent stress in the private credit market should have a limited impact on Japan's major financial institutions, although risk could manifest through indirect channels across financial groups, Fitch said.Regulators have examined private credit exposure but have not designated it as a domestic financial risk, which aligns with Fitch's view of the assets' limited scope in Japan.The country's megabanks and life insurers also have narrow direct private credit exposure if assessed within their sizable overall portfolios, Fitch said.Risks will come from indirect channels such as fund finance, warehouse lending, leveraged finance, and collateralized loan obligations, the rating agency said.Given the difficulty in managing private credit risks, financial institutions will lean on long-standing risk-management frameworks, monitoring, and stress testing, among other measures, to contain them, Fitch said.

Asia Week Ahead: Central Bank Decisions; Inflation Prints; and Trade Data

For the week ahead in Asia, the economic calendar is packed with major data releases, central bank decisions and inflation updates across the region.Monday brings China's first-quarter industrial profits data, as well as Malaysia's producer prices.On Tuesday, markets will turn to the Bank of Japan's interest rate decision, alongside trade figures from Hong Kong and Macao, and India's March production report.Wednesday features Thailand's central bank rate decision and Australia's closely watched quarterly inflation print, while Thursday brings China's official and private PMI readings.On Friday, Japan's Tokyo core inflation reading will be in focus, along with South Korea's April trade data.Here's what to watch in the week ahead.MONDAY, April 27The week kicked off with the release of China's industrial profits data for the first quarter.The total profits of China's industrial enterprises rose 15.5% year on year to 1.696 trillion yuan during the first three months of 2026, with increases seen in the mining, manufacturing, technology, and chemical industries.A drop in profits was witnessed in the utilities industry, as well as the electricity and heat and agricultural industries, data from the National Bureau of Statistics showed.Singapore disclosed its manufacturing output stats for March, highlighting a 10.1% jump in production thanks to strong growth across almost all clusters.Malaysia's producer prices rose in March for the first time in a year, driven largely by a rebound in the mining sector, according to Trading Economics.Producer prices climbed 1.1% year on year, reversing a 3.4% decline in the previous month.Meanwhile, Taiwan's consumer confidence index edged up to 62.47 in April, rising 0.17 points from March.The uptick was driven by improvements in four sub-indicators, with sentiment on employment opportunities posting the largest monthly gain.A pair of reports covering business and consumer confidence was also due in the Philippines.TUESDAY, April 28Markets will turn their attention to an interest rate decision scheduled in Japan.The upcoming decision could be a complicated one for the Bank of Japan as it grapples with intensifying inflation domestically and the uncertainty surrounding the Middle East, ING said in a preview.While markets broadly expect the central bank to maintain rates at 0.75%, ING said it continues to believe there's a chance the Bank of Japan may hike rates.Japanese unemployment data is also due the same day, with observers expecting the jobless rate to hover around the 2.6% mark, unchanged from the prior month, according to a consensus compiled by Trading Economics.Hong Kong will disclose trade stats for March. According to Trading Economics, the city state's trade deficit could narrow to HK$43 billion from the HK$64.2 billion recorded in February.Macao will similarly release balance of trade figures. The city state's trade deficit could narrow to 9.4 billion pataca in March from 9.9 billion pataca a month prior, Trading Economics forecasted.India's industrial production data for March will also be in the news. A consensus compiled by Trading Economics indicated analysts expect India's industrial production growth to slow to a rate of 4.2% from 5.2% in February.India's manufacturing weakened in March as geopolitical tensions in the Middle East, unstable market conditions, and inflationary pressures impacted output, S&P Global said previously. However, conditions appeared to have improved in April, according to the firm's most recent flash purchasing managers' index release.South Korea's business confidence report for April will be due the same day.WEDNESDAY, April 29Thailand's central bank will meet for its interest rate decision.The Bank of Thailand is seen to hold rates steady at 1% amid softening growth and inflationary pressure due to the conflict in the Middle East, the Wall Street Journal reported.Thailand's March Industrial production data is also expected on the same day.Australia's latest inflation print will be in the news, providing markets with an overview of pricing pressure ahead of the Reserve Bank of Australia's May board meeting.Westpac said it expects to see a 4.2% yearly gain in headline inflation for the March quarter.The quarterly data is likely to affirm for the Reserve Bank of Australia that the underlying inflation pressures are evident in the economy before the escalation of the Middle East conflict in late February, ANZ said in a preview.In Singapore, March import and export prices will be expected, as well as producer price inflation data.THURSDAY, April 30China's manufacturing and services sectors will be in focus as the National Bureau of Statistics releases its monthly purchasing managers' index covering manufacturing, non-manufacturing, and general PMI for April.The release will be accompanied by a private reading on China's manufacturing sector from S&P Global.Economists at ING said they expect official data to show activity dipped back into contractionary territory following the expansion witnessed in March.ING forecasts manufacturing PMI falling to 49.9 and the non-manufacturing PMI dipping to 49.8, and said it expects to see pricing pressure continuing to build in the PMI sub-indices.Taiwan will release its first-quarter advance gross domestic product growth rate, with markets looking for signs of whether the island state's economy can continue posting stellar growth due to its global positioning in high-precision semiconductor production.Researchers at ANZ expect Taiwan's first-quarter GDP growth rate to come in at 11.8%, slowing from the 12.7% rise witnessed in the prior quarter, the Wall Street Journal reported.In Australia, the first-quarter import and export prices data is expected. CommBank said it expects export prices to rise 1.2% while import prices to decline 0.6%, both on a quarter-on-quarter basis.Meanwhile, a confidence report due in New Zealand is likely to show a further deterioration in business sentiment due to the ongoing Middle East conflict, CommBank said in a preview.Further trade data is expected in the Philippines, which could see its trade deficit widen to $4.1 billion in March from $3.68 billion in April, according to Trading Economics.Both South Korea and Japan will release industrial production and retail sales data for March.ING said it expects Japan's industrial production to "rebound quite firmly" during the month. The firm expects industrial output to rise 2.2% year on year from the 0.4% rise witnessed in February.Japan will additionally release a consumer confidence report for April, while a similar release covering business confidence will be due in Singapore.Singapore's first-quarter preliminary unemployment rate will also be released on Thursday.Thailand's February retail sales stats will be due.FRIDAY, May 1Japan's closely watched Tokyo core consumer price index for April will capture headlines, offering markets an early indicator of the overall inflation rate in the country."The Tokyo CPI is expected to rise faster in April, reflecting recent energy price hikes, a weak JPY, solid wage growth, and bi-annual price adjustments," ING said in a preview.South Korea announces April trade data.The country's trade surplus could drop marginally to $26 billion from $26.2 billion a month prior, even as exports show a 50% year on year growth due to robust chip shipments, ING said.A consumer confidence report due in New Zealand could show sentiment weakening further in April and over the coming months amid the Middle East conflict, CommBank said in a preview."As the conflict progresses, overall consumer confidence is expected to continue falling," CommBank said.Neighboring Australia will release first-quarter produce price data.On the activity front, S&P Global releases its PMI reports covering manufacturing activity in Australia and Japan.

Japanese Stocks Climb as Iran's Plan to Reopen Strait Boosts Sentiment

Japanese shares ended higher on Monday, tracking a broader risk-on sentiment after reports that Iran proposed reopening the Strait of Hormuz to the U.S., easing concerns over stalled peace talks and potential supply disruptions.The Nikkei 225 rose 1.4%, or 821.18 points, to close at 60,537.36.Cautious optimism returned on Monday after talks broke down over the weekend, when U.S. President Donald Trump scrapped an envoy visit, and Tehran ruled out negotiations under pressure.Iran has floated a plan through Pakistani mediators to extend the ceasefire and create space for broader talks, with nuclear discussions to follow once a U.S. blockade of the Strait of Hormuz is lifted. The proposal has been delivered to the White House, with no clear response yet. Trump is due to meet his national security team later in the day.In economic news, Japan's leading index rose to 113.3 in February after an upward revision, while the coincident index fell to 116.3 from January's revised 118.1, government data showed Monday.On the corporate front, Rohm (TYO:6963) fell 9% after saying it has not supported Denso Corporation's (TYO:6902) share acquisition proposal and that recent media reports did not originate from the company.Eneos (TYO:5020) slipped over 1% after saying it is strengthening governance following the indictment of its unit over alleged diesel price coordination in Tokyo.Kyorin Pharmaceutical (TYO:4569) edged down over 1% despite plans to transfer its generic drug business to a Daito-led platform as it shifts focus to new drug operations.

Japan Leading Index Rises, Coincident Index Eases in February

Japan's leading economic index rose in February, while the coincident index eased, government data showed Monday.The leading index, which gauges the outlook for the months ahead based on indicators such as job offers and consumer sentiment, was revised up to 113.3 from a preliminary 112.4 and from a downwardly revised 112 in January.The coincident index, which tracks current economic activity including factory output, employment and retail sales, stood at 116.3, down from an upwardly revised 118.1 in January.

Keyence, Fanuc Shares Climb, Chugai Declines as Japan Stocks Mixed After Earnings

Japanese stocks that reported recent earnings traded mixed on Monday, with gains led by companies posting solid profit growth and shareholder returns, while one major drugmaker declined despite higher quarterly earnings.Keyence (TYO:6861) shares jumped 16% after reporting full-year results, with net income attributable to owners of parent rising 12% to 445.19 billion yen as revenue increased 10% to 1.169 trillion yen. The company raised its annual dividend to 550 yen per share from 350 yen.Fanuc (TYO:6954) shares also gained 16% after posting annual results, with net income attributable to owners of parent climbing 13% to 166.54 billion yen, while revenue rose 8% to 857.83 billion yen.The company expects full-year net income attributable to owners of the parent of 184.9 billion yen and revenue of 909.6 billion yen for the financial year ending March 31, 2027. It also raised its annual dividend to 107.09 yen per share from 94.39 yen.Meanwhile, Chugai Pharmaceutical (TYO:4519) fell 16% despite reporting stronger first-quarter earnings. Net income attributable to shareholders rose 19% to 115.42 billion yen as revenue increased 12% to 321.75 billion yen. The company expects full-year revenue of 1.345 trillion yen and core net income of 485 billion yen, with an annual dividend forecast of 132 yen per share.

Japanese Stocks Edge Up on Wall Street Earnings, Despite Stalled US-Iran Talks and Hormuz Closure

Japanese shares climbed on Monday's opening session, driven by solid corporate earnings from Wall Street, even as peace negotiations between the U.S. and Iran broke down, extending the shutdown of the Strait of Hormuz.The Nikkei rose modestly by 164.5 points, or 0.3%, to start trading day at 59,880.71.Markets are expected to stay tense as several major central banks, including the Bank of Japan, announce their policy decisions starting Tuesday.Although investors broadly anticipate no change in interest rates, traders will watch closely for any signals that officials are worried about inflation risks arising from oil supply disruptions linked to the Iran conflict.

Market Chatter: Bank of Japan Expected to Hold Rates Steady

The Bank of Japan is anticipated to leave interest rates unchanged at its upcoming Tuesday meeting, Bloomberg News reported on Monday.Only a few weeks ago, many market participants and analysts expected Ueda and the board to proceed with policy normalization by raising rates after their two-day session, the news wire said.However, those expectations faded when U.S. President Donald Trump's conflict with Iran drove oil prices higher, reducing the market's probability of a rate hike to just 7%, the publication said.Consequently, many economists have revised their forecasts, now pointing to a potential rate increase in June instead, the report said.(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)