Asia report: Markets mixed after fresh dump of regional data

(Sharecast News) - Asia-Pacific markets closed mixed on Wednesday after a positive session on Wall Street overnight, while oil prices fell back after gains during US trading hours.

"The dollar is squeezing higher, the yen is sliding without Tokyo's usual bark, gold is cracking under the weight of higher-rate risk, and the UK's latest 'black hole' story looks more political theatre than fiscal earthquake," said Patrick Munnelly, market strategy partner at TickMill.

Brent crude futures were last down 1.7% on ICE at $71.71 per barrel, while the NYMEX quote for West Texas Intermediate fell 1.7% to $68.32.

Munnelly said markets were starting July with a cleaner macro message than they ended June, with US rates back in the driving seat and stress showing up first in foreign exchange.

"The dollar has pushed higher against every G10 peer as investors wait for the next steer from central-bank speakers, including Fed chair Warsh, with the market increasingly willing to entertain the idea that the Federal Reserve may not be done tightening," he said.

The dollar spot index rose 0.2%, extending last quarter's 0.6% gain, as Tuesday's nine-basis-point jump in the US 10-year yield continued to reverberate across asset classes. Treasuries were steadier in Asia, but Munnelly said the message from rates markets was clear.

"If the Fed is still leaning hawkish, the Dollar remains the path of least resistance," he said.

Markets mixed after another data dump

Japan's Nikkei 225 rose 0.59% to 70,474.96, while the broader Topix gained 0.42% to 4,011.50.

Sumco Corporation surged 17.37%, Taiyo Yuden climbed 12.43%, and Screen Holdings added 9.46%.

The Bank of Japan's Tankan survey showed business sentiment in the manufacturing sector strengthening by more than expected.

The large manufacturing index rose to 22 in the second quarter from 17 previously, ahead of expectations for a decline to 16.

The non-manufacturing index increased to 37 from 36, also beating consensus expectations for 35.

Japan's consumer confidence index meanwhile climbed to 33.8 in June from 33.6 in May, although it remained below forecasts for 34.0.

It was the highest reading since February, with sentiment improving across overall livelihood, employment prospects and willingness to buy durable goods, while the income growth indicator was unchanged at 40.3.

Munnelly said the yen remained the bigger macro fault line in Asia, with dollar-yen now through JPY 162 and markets looking toward JPY 163 and beyond as the next test of Tokyo's tolerance.

"The striking point is not just the level, but the official response," he said.

"Japan's top currency official, Mimura, has so far avoided the Finance Ministry's standard threat of 'decisive action', suggesting authorities may be more willing to live with yen weakness than they were during the 2024 intervention cycle."

Munnelly said that was a subtle but important signal, adding that traders were likely to keep probing the upside in dollar-yen until language hardened or actual intervention risk became credible again.

In China, the Shanghai Composite rose 0.44% to 4,112.45, while the Shenzhen Component fell 0.53% to 16,119.17.

Tianfeng Securities gained 10.09%, Fujian Aonong Biological Technology Group rose 10.07%, and Ningbo Fuda added 10.06%.

The RatingDog China manufacturing PMI edged down to 51.7 in June from 51.8 in May, but remained above forecasts for 51.6 and the long-run survey trend of 50.8.

It marked the weakest factory expansion since March, although output grew solidly and new orders rose for a thirteenth straight month, matching the joint-longest expansion sequence on record.

Foreign sales fell for a second consecutive month, while employment increased for the first time in three months and at the strongest pace since August 2023.

Input price inflation eased from April's four-year high to its weakest level since January, while output price inflation rose for a sixth consecutive month.

Business sentiment deteriorated to a five-month low.

Markets in Hong Kong were closed for the Establishment Day holiday.

South Korea's Kospi 100 fell 2.58% to 10,495.59.

SK Holdings dropped 8.51%, LG Innotek lost 7.54%, and Samsung C&T declined 7.36%.

South Korea's exports surged 70.9% year on year in June, their fastest rate of growth since 1978 and well ahead of expectations for a 61% increase.

Imports rose 30.1% to $66.10bn, also beating expectations for 26.3%, while the trade surplus widened to $36.15bn from $27.04bn in May.

South Korea's factory activity expanded for a seventh consecutive month in June, though at a slower pace as export demand weakened.

The S&P Global PMI fell to 52.1 from May's 54.8, which had been the highest reading in more than five years.

Output and new orders grew more slowly, while new export orders fell for a second straight month amid the lingering impact of the Middle East conflict.

Business optimism weakened to its lowest level since November 2025 on concerns over domestic demand and the prospect of a prolonged period of high raw material prices.

Sydney in the red as Objective Corporation tumbles

Heading down under, Australia's S&P/ASX 200 fell 0.64% to 8,722.90.

Objective Corporation plunged 34.47% after the Defence Digital Group declined to renew the Objective ECM Upgrade and Support Program agreement that had been in place across the Australian Department of Defence for more than 25 years.

The company said there would be no impact on FY26 revenue or earnings, but the non-renewal would reduce its annual recurring revenue balance and leave FY26 ARR approximately in line with FY25 on a constant currency basis, below the 10% to 14% growth it had expected if the agreement had been renewed on anticipated terms.

Objective said the Department of Defence would no longer have access to its dedicated Upgrade and Support Program capabilities from 1 July, although the non-renewal did not restrict its ability to sell other solutions to the department.

Founder and chief executive Tony Walls said the company was "deeply disappointed" by the short-notice decision, adding that Objective would continue to work constructively with defence and national security customers.

Elsewhere, Alcoa Corporation fell 7.21%, while Sims Metal Management lost 5.66%.

Australia's Industry Index edged up 0.5 points to -30.0 in June, signalling modest relief as lower fuel prices eased energy-related pressures, although conditions remained weak.

New orders fell 5.1 points to -41.0, among the lowest readings since the pandemic, while activity and sales declined 8.7 points to -42.4.

Employment remained in contraction at -15.5, and cost pressures intensified as input prices surged 15.8 points to 80.5.

Sales prices rose 1.0 point to 19.2, leaving a record 61.3-point margin gap.

Capacity utilisation eased to 72.8%.

Australia's seasonally adjusted dwelling approvals meanwhile fell 1.1% month on month to a four-month low of 17,019 units in May, after a 0.2% decline in April and slightly weaker than expectations for a 1.0% fall.

The drop was driven by a 10.4% decline in approvals for private sector dwellings excluding houses, while permits for private sector houses rebounded 2.8%.

On an annual basis, total dwelling approvals were 5.3% higher, slowing from 10.9% growth in April.

Across the Tasman Sea, New Zealand's S&P/NZX 50 slipped 0.08% to 13,610.50.

ANZ Group Holdings fell 3.33%, Fletcher Building lost 3.24%, and Westpac Banking Corporation declined 2.4%.

Dollar makes gains on Asia-Pacific peers

In currencies, the dollar was last up 0.08% on the yen to trade at JPY 162.68, as it gained 0.37% against the Aussie to AUD 1.4507, and advanced 0.02% on the Kiwi to change hands at NZD 1.7617.

Reporting by Josh White for Sharecast.com.