Asia report: Markets mixed on wave of regional data

(Sharecast News) - Asia-Pacific markets closed mixed on Tuesday after the Dow Jones Industrial Average rose to a fresh record close, as investors welcomed a pause in hostilities between the US and Iran, while a renewed surge in semiconductor stocks helped support parts of the region.

"What a difference a session makes," said Patrick Munnelly, market strategy partner at TickMill.

"The AI trade has found its swagger again - semiconductors are dragging Asia to fresh highs and closing out the strongest quarter in nearly two decades."

On Sunday, Washington and Tehran agreed to halt attacks and allow commercial vessels to pass through the Strait of Hormuz.

A US official told CNBC that "both sides will stand down for now and vessels can move freely."

Munnelly said risk appetite had improved because markets were again pricing de-escalation rather than renewed conflict, although he cautioned that the rally was more selective than headline index gains suggested.

"The rally is real - but the yen, the oil surplus and a fragile UK consumer are the cracks beneath the record print," he said.

Oil prices were little changed in Asian trade as tensions appeared to ease.

Brent crude futures were last up 0.01% on ICE at $73.16 per barrel, while the NYMEX quote for West Texas Intermediate rose 0.16% to $70.86.

"In the oil market, Brent is trading around $72.45 per barrel and is on course for its steepest quarterly drop since the onset of the pandemic, as shipments through the Strait of Hormuz have ramped up following positive developments in peace negotiations," Munnelly said.

He said the spot picture was firmly disinflationary, with normalising shipping flows and the possibility of a surplus weighing on prices, but geopolitical risk had not disappeared entirely.

"At the same time, a senior Iranian official reaffirmed the nation's commitment to oversee maritime traffic in the Strait of Hormuz, heightening the stakes ahead of renewed talks with the US aimed at concluding their longstanding conflict," he said.

"For now, cheaper crude is a clear macro positive, easing headline inflation pressure across importers."

Markets mixed on tidal wave of regional data

Japan's Nikkei 225 rose 0.86% to 70,062.32, while the broader Topix gained 0.32% to 3,994.76.

Taiyo Yuden climbed 8.28%, Furukawa Electric rose 7.04%, and Screen Holdings added 6.2%.

Rakuten gained 5.44% after reports that it is set to receive JPY 150bn in government subsidies to help a consortium it leads develop a domestic low-Earth-orbit satellite communications network.

Yields on Japanese government bonds surged as the yen fell to a 40-year low against the dollar.

The benchmark 10-year yield was five basis points higher at about 0700 BST, according to CNBC, while 20- and 30-year yields jumped 10 basis points.

The 30-year yield was trading at 3.939%, close to the 4% level it first broke above in May.

Japan's unemployment rate was unchanged at 2.5% in May, in line with expectations and remaining at its lowest level since July 2025.

The number of unemployed fell by 50,000 to a 10-month low of 1.74m, while employment rose by 610,000 to a record 68.82m.

The labour force increased to an all-time high of 70.57m, while the number of people outside the labour force fell to a record low of 38.96m.

The jobs-to-applicants ratio slipped to 1.17 from 1.18, its lowest level in five months.

Japan's industrial production meanwhile rose 0.5% month on month in May, matching April's pace but missing expectations for a 1.1% increase.

It marked the second consecutive monthly expansion, although output fell 1.7% year-on-year, the first annual decline in six months.

Housing starts surged 33.9% year-on-year in May, accelerating from 11.4% growth in April and beating expectations for a 31.8% rise.

In China, the Shanghai Composite rose 0.5% to 4,094.40, while the Shenzhen Component gained 2.48% to 16,205.56.

Fujian Forecam Optics climbed 13.09%, Guangzhou Fangbang Electronics rose 12.43%, and Anji Microelectronics Tech added 11.37%.

China's official manufacturing PMI rose to 50.3 in June from 50.0 in May, beating forecasts for 50.1 and returning to expansion.

The non-manufacturing gauge, covering construction and services, increased to 50.2 from 50.1.

The China Beige Book also reported signs of recovery after two sluggish months, with manufacturing activity and retail sales rebounding.

Exports remained a bright spot as US importers brought forward shipments following US president Donald Trump's meeting with Chinese president Xi Jinping in May and ahead of the expiry of a 10% levy under Section 122 in July.

"China's manufacturing and non-manufacturing sectors both outperformed expectations in June, buoyed by robust export activity that offset slowing domestic growth," Munnelly said.

He said the composition of China's data was worth noting, with external demand carrying the load while the domestic engine cooled.

"That mix supports near-term activity but leaves the recovery dependent on a trade backdrop that the EU timeline shows is far from settled," he said, noting that the EU and China had set an October deadline to resolve trade disputes.

Hong Kong's Hang Seng Index fell 0.63% to 22,881.02.

Nongfu Spring dropped 8.41%, Laopu Gold lost 5.3%, and China Mengniu Dairy declined 4.34%.

South Korea's Kospi 100 rose 1.3% to 10,773.31.

LG Innotek gained 7.21%, Samsung Electro-Mechanics rose 7.16%, and LS Industrial Systems added 6.25%.

Samsung Electro-Mechanics advanced after announcing a KRW 450bn, or $290.67m, supply contract with an undisclosed global big tech company for multilayer ceramic capacitors used in artificial intelligence.

The contract will run from January to December 2027, and the company said it was discussing additional supply after 2027.

Sydney rises as investors parse RBA minutes

Heading down under, Australia's S&P/ASX 200 fell 0.51% to 8,778.70.

Vault Minerals dropped 7.13%, Perseus Mining lost 6.98%, and Regis Resources declined 6.94%.

Minutes from the Reserve Bank of Australia's June 15-16 meeting showed policymakers remained concerned that inflation was still well above target, with underlying pressures expected to intensify in the June quarter.

The board said further tightening remained possible after three rate hikes this year, noting that restrictive policy and elevated oil prices could temper demand and help rebalance the economy.

Headline inflation eased to 4.0% in May from 4.2%, but core inflation accelerated, with the trimmed mean rising to 3.6% from 3.4%.

Australia's competition regulator meanwhile announced it was taking Amazon's Australian unit to court, alleging unfair terms in Prime subscription contracts allowed it to introduce advertising to Prime Video.

The Australian Competition and Consumer Commission said it was seeking consumer redress, penalties, costs, declarations and other orders.

"We allege that Amazon AU included multiple unfair terms in its contracts with Australian annual Prime subscribers, and it then relied on some of these terms to bring ads onto Amazon Prime Video," said ACCC chair Gina Cass-Gottlieb.

Amazon Australia said it was reviewing the case and had cooperated with the investigation.

Across the Tasman Sea, New Zealand's S&P/NZX 50 rose 0.56% to 13,621.66.

Scales Corporation gained 4.35%, Mercury NZ rose 3.45%, and Oceania Healthcare added 2.7%.

New Zealand's ANZ Business Outlook Index surged to 36.6 in June from 10.0 in May, its highest level since February.

Firms' own activity outlook rose to 36.9 from 25.6, while export intentions, profit expectations, investment intentions and employment intentions all strengthened.

Pricing intentions eased to 50.7 from 56.7, cost expectations fell to 84.7 from 90.4, and inflation expectations declined to 3.36% from 3.63%.

Credit availability also improved sharply, while sentiment strengthened across residential and commercial construction.

Dollar makes gains on weakening yen

In currencies, the dollar was last up 0.24% on the yen to trade at JPY 162.33 as it gained 0.05% against the Aussie to AUD 1.4527, while it fell 0.11% on the Kiwi to change hands at NZD 1.7678.

Reporting by Josh White for Sharecast.com.