Nikkei 225

Market Chatter: Japanese Banks Confront a Historic Shift as Loan Growth Outpaces Deposits

Japanese banks are facing an unprecedented challenge as loan growth now exceeds deposit growth, reversing a decades-long trend driven by deflation and cash hoarding, Bloomberg News reported on Wednesday, citing industry officials.A surge in borrowing, fueled by rising corporate capital investment and larger buyout deals, pushed outstanding loans up 5.4% year-on-year in April, while deposits grew only 1.9%, the news wire said.This imbalance could potentially restrain lending and force banks to seek more expensive alternative funding sources, the publication said.Sumitomo Mitsui Financial Group (TYO:8316) CEO Toru Nakashima said lenders must become more selective, a stark contrast to the past when abundant deposits allowed aggressive lending, the report said.A senior official from Japan's Financial Services Agency noted that the regulator is closely watching this trend, as it was not a major concern until recently, it added.(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 Tertiary Industry Index Slips 0.2% in March

Japan's tertiary industry activity index slipped 0.2% in March, an improvement from the 0.4% contraction in February, reported the Ministry of Economy, Trade, and Industry (METI) on Tuesday.On an annual basis, the index climbed 2.6%.The seasonally adjusted March index for broad-range personal services slid 0.7% in March from February, but was up 1.5% on year.The seasonally adjusted broad-range business services index gained 0.4% in March from the month prior, and rose 3.3% on year.

Japan's Revised Industrial Production Index Slips 0.4% On Month

Japan's industrial production index (IPI) slipped on a seasonally adjusted 0.4% month on month in March, revised data from the Ministry of Economy, Trade and Industry on Friday showed.On a year-on-year basis, the index gained 2.4%, better than the preliminary reading of 2.3% year-over-year increase.Shipments slid on a seasonally adjusted 0.9% month-on-month, while inventories fell 1.8%.On a year-on-year basis, shipments rose 2.2% whille inventories dropped 5.3%.

Persian Gulf Outlook Roils Asian Stock MarKets

Asian stock markets turned in a choppy Tuesday, as traders weighed evolving media reports regarding Persian Gulf hostilities and softer oil prices.Brent oil futures eased lower by 1.7%, to $110.22 a barrel, during Asian market hours.Hong Kong and Shanghai gained ground, while Tokyo finished in the red. Other regional exchanges were choppy.In Japan, the Nikkei 225 traded higher on a strong economic report, but finished off 0.4% as tech issues sagged, following softness in US peer issues.The benchmark Nikkei 225 fell 265.36 to 60,550.59, as losing issues outnumbered gainers 156 to 67.Leading the upside was video-game maker Konami, up 9.2%, while electronic-products maker Fujikura fell 17%.In economic news, Japan's Q1 gross domestic product (GDP) expanded by 0.5%, or at a 2.1% annual rate, reported the Cabinet Office.In Hong Kong, the Hang Seng Index opened evenly and gained in trading, closing up 0.5% as traders weighed Middle East outlooks and supported tech shares.The broad gauge Hang Seng rose 122.67 to 25,797.85, as gaining issues outnumbered losers 45 to 43. The Hang Seng TECH Index rose 0.3% on the day, while the Mainland Properties Index fell 0.5%.Leading the upside was state oil-giant CNOOC, gaining 3%, while Li Auto declined 4.3%.On the mainland, the Shanghai Composite rose 0.9% to 4,169.54.On the other regional exchanges, the S. Korean KOSPI fell 3.3%; the Taiwan TWSE declined 1.8%; the Australian ASX 200 inclined 1.2%; the Singapore Straits Times Index rose 1.5%, and the Thai Set declined 0.1%. In late trading in Mumbai, the Sensex was down 0.2%.The MSCI All Country Asia Pacific Index fell 0.6% on the day.

Market Chatter: Japan and South Korea to Agree on Joint Oil Reserve Framework

Japanese Prime Minister Sanae Takaichi and South Korean President Lee Jae Myung will discuss at their summit to set up a joint crude oil procurement framework, including a shared reserve, Nikkei Asia reported Tuesday.Takaichi's two-day South Korea visit is part of ongoing shuttle diplomacy, with the Middle East situation likely topping the leaders' agenda, the news agency said.The joint reserve initiative will fall under the POWERR Asia framework, an energy cooperation scheme with Southeast Asia that Takaichi announced in April, designed to help develop petroleum supply systems in countries with limited reserves, the publication 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.)

Japanese Shares Shed Early Gains, Close Lower as Investors Remain Cautious Over Middle East Crisis

Japanese stocks lost early momentum to close in the red on Tuesday despite having a strong start amid caution relating to the Middle East crisis.Asian equities showed mixed movement on Tuesday, as media reports suggest that investors are still skeptical about the relief provided by the easing of oil prices and President Donald Trump's decision to call off fresh military strikes against Iran, which raised hopes for a peace deal and reopening of the Strait of Hormuz.The Nikkei 225 closed down 265.36 points or 0.4% at 60,550.59.The bourse had opened on a positive note, lifted by the optimism in the local market after Japan's economy grew faster than expected in the first quarter, supporting further rate hikes by the Bank of Japan.According to a Cabinet Office report released Tuesday, real GDP grew at an annualized rate of 2.1% in the January-March period - before the full effects of the war in Iran began to materialize.On the corporate side, shares of JX Advanced Metals (TYO:5016) closed down nearly 5% after the company finalized the terms of its two tranches of zero-coupon convertible bonds due in 2029 and 2031.Also, Daiwa Securities (TYO:8601) shares closed up nearly 2% after a Nikkei Asia report said the company plans to allocate 100 billion yen into battery storage facilities by 2030.

Market Chatter: Weak Yen Drives Record Japanese Used Car Exports, But Domestic Affordability Worsens

Japan shipped a record number of used cars overseas last year, fueled by strong demand linked to the weak yen, Nikkei Asia reported on Tuesday, citing a regional purchasing manager at a used car dealer Nextage (TYO:3186).Rising procurement costs for used cars have pushed a growing number of Japanese dealerships into bankruptcy, the news daily said.Consequently, domestic buyers are left with very few options in the 1 million to 2 million yen range, which is generally seen as affordable, the publication said.A regional purchasing manager at major used car dealer Nextage noted that prices have surged dramatically over the last three years, 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: Carlyle Plans Larger Japan Fund; Commits to Working Within Local Priorities

Carlyle Group intends to make its next Japan investment fund larger than its current one, Nikkei reported on Tuesday, citing Chief Executive Officer Harvey Schwartz.Schwartz praised Japan's relatively low interest rates and its success in attracting global capital, noting that investment opportunities exist in succession planning, carve-outs, and take-privates, the publication said.The firm raised 430 billion yen or $2.71 billion for its fifth Japan-focused fund in 2024 and has been actively pursuing new deals, the news daily said.The deals include acquisitions of KFC Holdings Japan (TYO:9873), Hogy Medical (TYO:3593), and Omron's (TYO:6645) electronic components arm, the report said.Most recently, Carlyle announced it would acquire fire extinguisher maker Nippon Dry-Chemical (TYO:1909) in partnership with security firm Alsok, it added.(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.)

Japanese Shares Rise as Trump Halts Iran Strikes, While GDP Beat Supports BOJ Rate Hike Prospects

Japanese stocks advanced at the opening bell on Tuesday following President Donald Trump's decision to call off fresh military strikes against Iran, which raised hopes for a peace deal and reopening of the Strait of Hormuz.The Nikkei 225 rose 386.9 points or 0.6% to open at 61,202.84.Meanwhile, Japan's economy grew faster than expected in the first quarter, supporting further rate hikes by the Bank of Japan.According to a Cabinet Office report released Tuesday, real GDP grew at an annualized rate of 2.1% in the January-March period - before the full effects of the war in Iran began to materialize.

Japan's Economy Grows 2.1% in Q1, Beating Estimates

Japan's economy grew an annualized 2.1% in the first quarter, according to the first preliminary figures from the Cabinet Office.The latest print beat market expectations for a 1.7% increase, according to a Reuters poll.The world's fourth-largest economy grew 0.5% on a seasonally adjusted basis during the quarter, better than the revised 0.2% increase in the previous quarter.Domestic demand saw an annualized rise of 1%, with private demand, accounting for over half of Japan's GDP, increasing by 0.8%.Exports of goods and services rose 7.1%, while imports edged up 1.9%.

Market Chatter: Japan Rules Out Selling US Treasuries to Boost Yen, Citing Risks of Backfire

A senior Japanese Finance Ministry official has cast doubt on using U.S. Treasury sales to support the yen, warning that such a move could prove counterproductive, Bloomberg News reported on Tuesday.The official explained that selling U.S. bonds might push American yields higher, which in turn could weaken the yen further, the news wire said.While noting that Japan has ample cash and deposits for intervention, the official made these remarks in Paris on Monday following U.S. Treasury Secretary Bessent's visit to Tokyo, the publication said.Japan, the largest foreign holder of U.S. Treasuries with $1.19 trillion in combined official and private holdings, likely intervened in currency markets for the first time since 2024 late last month, yet the yen remains under pressure, it added.(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 Annualized GDP Growth Accelerates to 2.1% in Q1

Oil, China Economic Reports Damp Asian Stock Markets

Asian stock markets sagged on Monday, as the Strait of Hormuz remained closed to oil-tanker traffic, and after Beijing released a slate of tempered economic reports.Brent crude futures traded up 0.9% to $110.29 a barrel during Asian trading hours.Hong Kong, Shanghai, and Tokyo finished in the red, while other regional exchanges were choppy.In Japan, the Nikkei 225 opened lower on Wall Street cues and could not recover, finishing off 0.9% as traders weighed rising petroleum prices, higher domestic inflation, and the outlook for rate hikes from the Bank of Japan.The benchmark Nikkei 225 fell 593.34 to 60,815.95, as losing issues outnumbered gainers 159 to 62.Leading the upside was medical device maker Terumo, up 18.6%, while department store chain Marui declined 8.5%, with both moves following earnings releases.In Hong Kong, the Hang Seng Index closed down 1.1% after Beijing issued a slate of downbeat economic reports. Real estate shares were pummeled.The broad gauge Hang Seng fell 287.55 to 25,675.18, as losing issues outnumbered gainers 77 to 11. The Hang Seng TECH Index lost 2% on the day, while the Mainland Properties Index fell 4.7%.Leading the upside was China Telecom, gaining 6%, while Li Auto declined 14.1%.On the mainland, the Shanghai Composite fell 0.1% to 4,131.53.In economic news, mainland China retail sales in April rose a scant 0.2% on year, reported the National Bureau of Statistics (NBS).The nation's industrial output rose 4.1% on-year in April, but slowed from the 5.7% gain logged in March, added the NBS.Fixed-asset investment declined 1.6% on year in the first four months of 2026, while house prices in the 70-city sample slipped 0.19% on-month in April, according to official figures.On the other regional exchanges, the S. Korean KOSPI rose 0.3%; the Taiwan TWSE declined 0.7%; the Australian ASX 200 declined 1.5%; the Singapore Straits Times Index rose 0.1%, and the Thai Set was steady. In late trading in Mumbai, the Sensex was up 0.1%The MSCI All Country Asia Pacific Index fell 0.7% on the day.

Market Chatter: Japan to Issue New Cybersecurity Rules Leveraging Advanced AI for Vulnerability Detection

Japan plans to issue new cybersecurity guidelines requiring software developers to use powerful AI tools like Anthropic's Claude Mythos for vulnerability scanning, Nikkei Asia reported on Monday.The government, in collaboration with the Japan AI Safety Institute (AISI), will outline procedures for identifying and addressing system flaws using high-performance AI capable of autonomously detecting code weaknesses, the publication said.Digital Transformation Minister Hisashi Matsumoto is scheduled to hold a meeting on Monday with senior officials from key ministries, including the Ministry of Economy, Trade and Industry and the Financial Services Agency, to advance this initiative, 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.)

Asia Week Ahead: Central Bank Moves, Inflation Data, Trade Numbers and GDP Reports

For this week in Asia, the economic calendar features a busy slate of macro releases across the region.The week begins with a slew of closely watched indicators from China, including industrial production and unemployment data.On Tuesday, markets turn to Japan's first-quarter GDP estimates and Malaysia's April inflation print.Wednesday features policy decisions in Indonesia and China, along with trade data from Taiwan.Thursday brings Japan's latest trade figures and Australia's closely watched labor market report. On Friday, Japan returns to the spotlight with its April inflation print.Here's what to watch in the week ahead.MONDAY, May 18The week kicked off with a flurry of macro releases from China.Industrial production: A 4.1% year-over-year expansion was recorded in April, sharply slowing from the 5.7% growth in March and way below expectations of a 5.9% rise.Retail sales: Growth decelerated to 0.2% year on year in April, versus 1.7% a month prior.Unemployment: The rate eased to 5.2% in April from 5.4% a month earlier.Meanwhile, prices of new residential properties in China's first-tier cities grew 0.1% month on month in April, decelerating from the 0.2% expansion in March.Chinese investments in real estate development fell 13.7% year on year to 2.397 trillion yuan between January and April.Outside China, Thailand reported that its gross domestic product grew at a faster rate of 2.8% in the first quarter of 2026 from 2.5% in the last three months of 2025.In Singapore, April trade showed a 24.5% year on year rise in non-oil domestic exports, extending the 15.3% increase in the previous month.Elsewhere, New Zealand's services sector showed a modest improvement in April but remained in contraction, with persistent cost pressures and global shipping disruptions continuing to weigh on sentiment, according to BusinessNZ.The BusinessNZ Performance of Services Index rose to 48.9 in April from 46.2 in March. A reading below the 50-point mark points to contraction.TUESDAY, May 19Markets will turn their attention to Japan's preliminary first-quarter GDP.Economists at ING said they expect the economy to grow at a similar rate as the previous quarter's 0.3% on a seasonally adjusted basis. "The war's impact on GDP should be minimal in 1Q26," the bank said in a preview.Meanwhile, Malaysia will disclose its April inflation print, with Trading Economics expecting prices to rise at a faster pace than the 1.7% year over year growth seen in March. According to the data platform, Malaysia's CPI could rise at a rate of 2.7%.In Australia, the Reserve Bank of Australia's meeting minutes will add color to the central bank's recent decision to increase the official cash rate by 25 basis points to 4.35%.CommBank said the minutes may provide more details on the board's discussion and how members were assessing the impact of the conflict around Iran.A consumer confidence report, due for release the same day, will capture sentiment over the most recent RBA rate hike and the ongoing conflict in the Middle East.Lastly, Hong Kong will report April unemployment stats on the same day.WEDNESDAY, May 20Bank Indonesia will meet for its monetary policy meeting and could raise rates by 25 basis points to 5% amid a depreciation of the local currency and a shift in expectations for Federal Reserve rate cuts, which bodes unfavorably for the Indonesian rupiah, ING forecasted.China will similarly set its one-year and five-year loan prime rates, with markets expecting no change in the prevailing rates of 3% and 3.5%, respectively.Trade data from Taiwan and Malaysia will be due.Taiwan is once again expected to show a "strong reading" when it releases April export orders data, with growth topping 54% year on year, ING said in a preview.The island nation started the year "quite strongly" amid external demand for its main high-tech products, which is expected to continue, according to the note.Meanwhile, Malaysia's trade surplus is expected to narrow to 10.5 billion ringgit from 24.6 billion ringgit in the month prior, Trading Economics forecasted.The Reuters Tankan Index for May, a key gauge of Japanese business confidence, will be due the same day.THURSDAY, May 21Japan will release several economic indicators on Thursday, including April trade data and March machinery orders.The country is expected to report a trade deficit of 29.7 billion yen for the month, reversing from a surplus of 667 billion yen in March, according to a Trading Economics consensus.New Zealand will similarly report its April trade balance, with analysts forecasting a trade surplus of around NZ$840 million, according to a Trading Economics consensus.Neighboring Australia will report labor data for April. Westpac expects unemployment to remain at 4.3%.Elsewhere, Hong Kong will report April inflation data while Macau will disclose first-quarter retail sales stats. In South Korea, the April producer price inflation data will be due.On the activity front, S&P Global will release flash purchasing managers' index reports covering May manufacturing, services, and composite activity in India, Australia and Japan.FRIDAY, May 22Japan's April inflation print will capture headlines on Friday, giving markets a look into how the energy shock from the Middle East conflict is impacting the economy.Economists at ING said energy effects may have a limited impact on growth but a greater impact on inflation, which is expected to clock in at 1.8% year on year in April -- up from 1.5% in March."Higher energy costs are expected to increase overall inflation. The impact, though, will likely be still less significant than that observed in other Asian and developed countries," ING said in a note.Inflation data will also be due in Macau.Meanwhile, Taiwan could see a marginal drop in its unemployment when it releases April labor stats. According to Trading Economics, Taiwan's jobless rate could go down to 3.3% from 3.35%.New Zealand is expected to see a "muted" rise in real retail sales when reporting its Q1 data, Westpac said in a preview. The bank expects a rise of 0.2% for the first three months of the year, versus the 0.9% growth recorded in the previous quarter. "The latter part of March saw fuel prices rising sharply, and that has been a drag on spending," Westpac said.Lastly, South Korea will release a report capturing consumer confidence for May. ING said it expects consumer sentiment to deteriorate further amid inflation hikes and energy headwinds.

Japanese Shares Fall as Oil Prices Climb on US-Iran Deadlock

Japanese equities closed lower on Monday, in line with its Asian peers, amid mounting pressure from rising oil prices as the negotiations in the Iran conflict stall.The Nikkei 225 closed down 593.34 points, or 1.0%, at 60,815.95.Fresh drone attacks in the Gulf regions pushed oil prices and bond yields higher on Monday, according to a Reuters report.Brent crude rose to over $111 per barrel, as the talks for the restoration of the passage through the strategic Strait of Hormuz remain unresolved.Investor sentiment was further dampened by U.S. President Donald Trump, warning that the "clock is ticking" before the U.S. launches harder strikes.A report by Nikkei Asia also indicated that yields on 10-year Japanese government bonds hit their highest in 29 years at 2.8% on Monday, amid investor concerns over inflation and the fiscal situation.On the corporate side, shares of Japan Post Insurance's (TYO:7181) slumped over 11% on Monday, even as its net income attributable jumped 37% to 168.80 billion yen for the fiscal year 2025 from 123.47 billion yen a year earlier.

Japanese Shares Decline at Open as Oil Prices Surge on Iran Stalemate

Japanese equities opened lower on Monday as deadlocked negotiations over the Iran conflict drove oil prices higher and intensified a rout in global bond markets.The Nikkei 225 dropped 109.4 points, or 0.2%, to start the trading session at 61,299.87.Brent crude advanced to above $110 per barrel, amid a lack of progress in talks to restore passage through the strategic Strait of Hormuz and following U.S. President Donald Trump's warning that Iran faces a "ticking clock" to reach an agreement.Meanwhile, the White House announced that Beijing has committed to purchasing at least $17 billion in U.S. agricultural products each year through 2028 after Trump's two-day summit in China.Monday's Group of Seven meeting coincides with the anticipated swearing-in of Kevin Warsh, Trump's nominee, as the new chair of the U.S. Federal Reserve.

Market Chatter: Bain Capital Earmarks Half of $10.5 Billion Asia Fund to Japan

Bain Capital allocated half of the capital from its newly established $10.5 billion Asia-focused private equity fund to Japan, representing the firm's largest-ever regional fund, Nikkei Asia reported on Monday.The firm plans to use the new fund for major Japanese deals, including take-private transactions and divestitures of non-core operations, the news daily said.Bain's recent deals include the 510 billion yen acquisition of Tanabe Mitsubishi Pharma (now Tanabe Pharma) from Mitsubishi Chemical (TYO:4188) in July 2025, followed by the 810 billion yen purchase of Seven & i's (TYO:3382) supermarket and restaurant subsidiary York Holdings.By the end of 2025, Bain's global AUM reached 225 billion, with Japan the second-largest market after the U.S.(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.)