Asia report: Markets mixed as China, Japan factory data disappoints

30th Apr 2025 10:44

(Sharecast News) - Asia-Pacific markets closed mixed on Wednesday as investors digested a range of key economic indicators and awaited the outcome of the Bank of Japan's policy meeting.

The BoJ, which began its two-day meeting today, is widely expected to keep interest rates unchanged at 0.5%.

"China's manufacturing sector has entered its most significant contraction since December 2023, highlighting the initial impact of the trade conflict with the US on the world's second-largest economy," said TickMill market strategy partner Patrick Munnelly.

"The gloomy stats impeded a rise in Chinese stocks, causing the CSI300 blue-chip index to reverse its earlier gains and close down.

"Despite Trump's attempt to mitigate the impact of his auto tariffs and indications of progress in ongoing trade talks, specific details remain limited, with commerce secretary Howard Lutnick mentioning he had secured a deal with a foreign nation."

Compounding the tariff concerns, Munnelly said investors were also contending with worsening US economic data as Trump's significant tariffs affected businesses and consumers domestically.

"In Japan, factory production saw a decline last month, suggesting weakening momentum for manufacturers as they navigated uncertainties related to Donald Trump's extensive tariff initiatives.

"Trump renewed his criticism of Federal Reserve chairman Jerome Powell while promoting his economic policies and tariff strategy during an event marking his 100th day in office.

"He signed two directives aimed at mitigating the effects of his tariffs on the automotive industry, responding to weeks of vigorous lobbying from automakers, parts suppliers, and dealers who warned that excessive tariffs could lead to increased vehicle prices, factory closures, and job losses."

Markets mixed as Trump makes latest tariff moves

Japan's markets advanced, with the Nikkei 225 gaining 0.57% to close at 36,045.38 and the broader Topix up 0.63%.

Gains were led by pharmaceutical and industrial stocks, including Sumitomo Dainippon Pharma, which surged 14.56%, TOTO up 9.49%, and Tokuyama rising 7.32%.

In China, sentiment was more cautious following weaker-than-expected manufacturing data.

The official PMI fell to a near two-year low, reflecting the strain of ongoing trade tensions with the United States.

On the equity front, the Shanghai Composite slipped 0.23%, weighed down by steep losses in smaller stocks such as Jiangsu Wuzhong Industrial and Anji Foodstuff, both down over 10%.

In contrast, the tech-heavy Shenzhen Component rose 0.51%.

Hong Kong's Hang Seng Index rose 0.51% to 22,119.41, buoyed by strong gains in consumer and technology names.

Chow Tai Fook Jewellery Group climbed 8.46%, while AIA Group and Xiaomi advanced 6.51% and 5.27%, respectively.

South Korea's Kospi 100 edged down 0.09% as losses in battery makers pressured the index.

LG Energy Solution dropped 7.29%, while LG Chemicals and LF Co both declined more than 4%.

Australian shares posted solid gains, with the S&P/ASX 200 rising 0.69% to 8,126.20.

The index was supported by better-than-expected first-quarter inflation data.

Mining and infrastructure firms led the rally, with St Barbara up 7.41% and Lend Lease Group gaining 3.94%.

New Zealand's S&P/NZX 50 lagged, falling 1.02% to 11,903.31.

Tourism Holdings and Ryman Healthcare were among the worst performers, dropping 6.16% and 5.56%, respectively.

In currency markets, the dollar was last 0.52% stronger on the yen, trading at JPY 143.07, as it gained 0.07% against the Kiwi to NZD 1.6870.

The greenback was, however, weaker on the Aussie, falling 0.2% to change hands at AUD 1.5633.

Oil prices were lower, with Brent crude futures last down 1.11% on ICE at $63.54 per barrel, and the NYMEX quote for West Texas Intermediate off 0.98% at $59.83.

Industrial output falls more than expected in Japan

In economic news, Japan's industrial output fell more than forecast in March, declining 1.1% from the previous month, according to government data.

The drop, sharper than the 0.4% fall anticipated by economists, was driven largely by a slowdown in motor vehicles, electrical machinery, and industrial equipment production.

In China, official data showed factory activity contracted in April, signaling renewed weakness in the manufacturing sector.

The purchasing managers' index (PMI) fell to 49.0, slipping below the 50-point level that separates growth from contraction and missing expectations for a 49.8 reading.

That marked the first contraction since January and a sharp reversal from March's strong showing, when manufacturers rushed to ship goods ahead of potential new US tariffs.

Separately, China Investment Corporation - the country's sovereign wealth fund - was seeking to sell about $1bn in private equity assets on the secondary market, according to a Reuters report citing sources.

The sale would reportedly include stakes across multiple funds managed by eight US-based firms, including Blackstone and Carlyle Group.

In Australia, first-quarter consumer prices rose 2.4% from a year earlier, slightly above the 2.3% forecast.

The figure matched the previous quarter's pace and remained at a four-year low, continuing a broader trend of disinflation since the post-pandemic price surge.

Although inflation had eased from its 7.8% peak in late 2022, the data suggested price pressures remain sticky in some sectors.

Reporting by Josh White for Sharecast.com.