APAC Market Wrap - 26 Jun

China: At the close, the Shanghai Composite fell 0.22%, the Shenzhen Component dropped 0.48%, and the ChiNext Index declined 0.66%. Markets rose early but closed lower, with the ChiNext leading losses.

 

Total trading volume across Shanghai and Shenzhen was 1.58 trillion RMB, down 19.6 billion RMB from the previous session.  

 

Sectors like defense equipment, cross-border payments, banking, and oil and gas led gains, while lithography machines, brain-computer interfaces, innovative drugs, and semiconductors lagged.  

 

Hong Kong: All three major Hong Kong indexes fell, with the Hang Seng Index down 0.61%, the Hang Seng Tech Index down 0.26%, and the H-share Index down 0.63%.  

 

Tech and internet stocks were mixed, most Chinese brokerage stocks fell, some stablecoin concept stocks rose, while lithium battery, automotive, and pharmaceutical stocks largely declined.  

 

Japan: The Nikkei 225 surged, closing at 39,584.58 yen, up 642.51 yen, returning to the 39,000-yen range for the first time since February 19 after about four months.  

 

By sector, 30 industries advanced, including non-ferrous metals, electrical, gas, insurance, wholesale, shipping, and machinery, while three industries—precision instruments, pharmaceuticals, and food—fell.  

 

South Korea: The KOSPI index fell 0.92% to 3,079.56. Office electronics, utilities, and telecom equipment rose, while media, software, and IT services saw broad declines.  

 

Singapore: The Straits Times Index rose 0.32%, up 12.48 points to 3,938.46. Medical distribution, semiconductors, and non-alcoholic beverages led gains, while cyclical retail, industrial products, and insurance saw slight declines.  

Key Events

Japan Posts Stellar First Half: M&A Deal Value Hits Record High!  

 

Data shows Japan’s M&A deal value reached a record $232 billion in the first half of 2025, more than tripling year-over-year. Asia’s M&A value hit $650 billion, doubling from last year.  

 

Industry experts say Japan’s M&A surge could counter global slowdown trends, with dealmakers eyeing Japanese firms’ low valuations, upside potential, and the country’s growing openness to M&A.  

 

Japan’s “Rice Shortage” Eases, Prices Drop to Three-Month Low  

 

Japan’s rice shortage, which drove prices higher and drew global attention, shows signs of easing, offering relief to consumers.  

 

According to the Ministry of Agriculture, Forestry and Fisheries, the average price for a 5kg bag of rice fell to 3,920 yen ($27.03) in the week ending June 15, dropping below 4,000 yen for the first time since early March.  

Institutional Views  

JPMorgan: Global Demand for Long-Term Assets Declining  

 

JPMorgan analyst Jay Barry said in a mid-year outlook that global investor demand for long-term assets appears to be waning. JPMorgan predicts this will lower U.S. 2-year Treasury yields while keeping 10-year yields near current levels, forecasting year-end yields of 3.50% and 4.35%, respectively.  

 

Westpac: RBA May Cut Rates in July, But Not Guaranteed  

 

Westpac expects the Reserve Bank of Australia to cut rates in July rather than August, but it’s not a done deal. If overseas risks are overweighed, the RBA may defy market pricing. However, now is the time to act, as the decision is imminent.  

 

The RBA’s outlook remains constrained by labor market tightness, slow productivity growth, and concerns about demand recovery impacting prices. Westpac expects vague or reluctant language in the post-meeting statement.  

 

Westpac predicts a terminal rate of 2.85% (three cuts after the upcoming one) but doubts the RBA will provide forward guidance in this direction.