Asia report: Markets mixed in subdued Christmas Eve trading

(Sharecast News) - Asia-Pacific markets were mixed in subdued Christmas Eve trading on Wednesday, with most benchmarks closing lower despite a firmer overnight lead from Wall Street.

Investors remained cautious amid thin holiday liquidity, while commodity markets drew attention as spot gold surged through $4,500 per ounce for the first time, extending a series of record highs this year and taking gains to more than 70% year to date.

Platinum also jumped to a fresh all-time high above $2,300 per ounce, supported by a weaker dollar, geopolitical tensions and expectations for US Federal Reserve rate cuts.

As AJ Bell investment director Russ Mould noted, "weakness in the dollar, expectations for further US rate cuts, concerns about government deficits and debt in the developed world and geopolitical tensions have all been combining to put precious metals on a pedestal."

US futures hovered near the flatline in early Asian hours after Wall Street's fourth straight session of gains, with the S&P 500 rising 0.46% to a record close of 6,909.79, just shy of its intraday peak of 6,920.34, led again by artificial intelligence-linked stocks.

Neil Wilson, UK investor strategist at Saxo Markets, said: "Good news is good news - the S&P 500 closed at a record high above 6,909 after a delayed US GDP report showed the economy grew at a rapid 4.3% pace in the last quarter."

He added that while the data initially unsettled markets, "the pull of two further rate cuts next year, despite the strong figures, was too strong and tech rose."

Tokyo edges lower as Japanese government bond yields climb

Japanese equities edged lower, with the Nikkei 225 down 0.11% at 50,358.00 and the broader Topix falling 0.46% to 3,407.37.

Losses were led by TDK Corporation, which slid 3.02%, MS&AD Insurance Group Holdings, down 2.76%, and Okuma Corporation, which fell 2.19%.

MS&AD said it had pushed back the planned establishment date of a new sub-subsidiary to 23 December from 30 November to allow more time to complete procedures, adding that the change would have no material impact on its consolidated financial results.

In fixed income, Japanese government bond yields rose further after NHK reported the government plans to issue around JPY 29.6trn in new bonds to fund its 2026 budget.

Yields on 30-year JGBs climbed more than 2 basis points to a record 3.454%, while 20-year yields rose just under one basis point to 2.992%.

The cautious tone reflected broader uncertainty around global monetary policy, with Swissquote senior analyst Ipek Ozkardeskaya noting that "trading volumes are thin - around 30% to 35% below the past month's average - yet the year keeps on giving."

Bank of Japan policy also remained in focus after minutes from its October meeting showed policymakers debating the need to continue raising interest rates toward a neutral level, with some members warning that a weaker yen could push inflation above target by lifting import costs.

The minutes revealed that several members already saw conditions as ripe for a rate hike but wanted more clarity on wage trends and uncertainty surrounding the policy direction of new prime minister Sanae Takaichi's new administration.

At that October meeting, the BoJ kept rates at 0.5%, though hawkish members Hajime Takata and Naoki Tamura dissented in favour of a hike to 0.75%.

The central bank subsequently raised rates to 0.75% in December, the highest level in 30 years.

Mainland equities outperform, Seoul falls

Mainland Chinese markets outperformed, with the Shanghai Composite rising 0.53% to 3,940.95 and the Shenzhen Component adding 0.88% to 13,486.42.

Guangdong Jia Yuan Technology surged 10.54%, Yongyue Science & Technology gained 10.09% and Xiamen ITG Group climbed 10.08%.

Yongyue disclosed that 3.5 million unrestricted shares, representing about 0.9740% of its total share capital, held by its controlling shareholder Jiangsu Huaying, would be subject to a judicial auction, adding that the sale will not affect operations or listing requirements.

Hong Kong's Hang Seng Index closed modestly higher, up 0.17% at 25,818.93, supported by gains in technology and industrial names.

SMIC rose 3.12% amid reports it planned to raise prices by around 10% for some mature-node chip production capacity, citing strong AI-driven demand and rising input costs.

China Hongqiao Group advanced 2.34% and CK Infrastructure Holdings gained 1.83%.

South Korean equities weakened, with the Kospi slipping 0.21% to 4,108.62.

Daesung Industrial plunged 15.9%, Han Kook Steel fell 12.96% and Keyang Electric Machinery dropped 12.28%.

The South Korean won strengthened more than 1% against the dollar, with Reuters reporting the national pension fund was conducting strategic foreign-exchange hedging.

Separately, data showed consumer confidence remained above neutral for an eighth straight month in December, with the composite index at 109.9, down 2.5 points from November's eight-year high, as rising prices and currency volatility weighed on sentiment.

Sydney in the red while Wellington rises

Australian stocks retreated, with the S&P/ASX 200 down 0.38% at 8,762.70, snapping a four-day winning streak.

Charter Hall Group fell 3.2%, Pro Medicus declined 2.8% and Austal slipped 2.57%.

In New Zealand, the S&P/NZX 50 edged up 0.08% to 13,529.06, led by gains in Fonterra Shareholders Fund, up 1.61%, Mainfreight, which rose 1.49%, and Precinct Properties, up 1.28%.

Dairy giant Fonterra was in focus after Jamaican conglomerate GraceKennedy agreed to acquire its stake in the Dairy Industries Jamaica joint venture, while the dairy group also said New Zealand's newly-concluded free trade agreement with India delivered limited gains for the dairy sector, with concessions largely restricted to infant formula and some milk proteins.

Dollar weakens against regional peers, oil prices manage gains

In currency markets, the dollar weakened against major Asia-Pacific peers, last trading down 0.28% on the yen at JPY 155.80, as it slipped 0.15% against the Aussie to AUD 1.4898 and lagged 0.04% from the Kiwi, changing hands at NZD 1.7111.

Oil prices edged higher, with Brent crude futures last up 0.16% on ICE at $62.48 per barrel, and the NYMEX quote for West Texas Intermediate rising 0.26% to $58.53.

Neil Wilson said commodities had eased slightly from extremes, noting that "gold, silver and platinum pulled back just a smidge from their all-time highs," while crude prices were "a touch firmer at a two-week high," even as broader markets remained cautious heading into year-end.

Reporting by Josh White for Sharecast.com.