Asia report: Markets finish choppy week in mixed state
By Josh White
Date: Friday 23 May 2025
(Sharecast News) - Asia-Pacific markets ended mixed on Friday as investors digested a range of economic data across the region and monitored signs of diplomatic engagement between the US and China.
A call between China's vice foreign minister Ma Zhaoxu and US deputy secretary Christopher Landau helped ease geopolitical tensions, with both sides agreeing to maintain communication, according to a Chinese Foreign Ministry readout.
"Asian stocks saw a rebound as investor confidence increased, setting a regional index on a path for a sixth consecutive week of gains, while Treasuries stabilised with diminishing worries about US fiscal policy," said TickMill market strategy partner Patrick Munnelly.
"The yield on the 30-year US Treasury remained stable at 5.04%.
"Meanwhile, the dollar index fell 0.2%, marking a total decline of 1.2% for the week - the largest shift in six weeks."
Munnelly noted that the week's bond market movements reflected investor anxiety regarding the fiscal stability of the US economy, heightened after Moody's downgraded the country's credit rating late last week.
"This development disrupted a period of relative calm in financial markets, following a month of upheaval due to president Donald Trump's tariff initiatives; US stocks even approached a bull market.
"The rebound in Treasuries on Thursday followed a recent selloff in the bond market, prompted by fears surrounding the rising US debt burden. Investors are apprehensive that Trump's recently passed tax legislation, which narrowly cleared the House, will further escalate the nation's already growing deficit.
"With 30-year Treasury bond yields topping 5% again on Wednesday, the nation's lenders introduced a stark economic reality check for Trump's fiscal approach."
Markets finish turbulent week in a mixed state
Japan's Nikkei 225 rose 0.47% to 37,160.47, lifted by strong gains in Japan Steel Works, which surged 10.05%, and advances in Mitsubishi Heavy Industries and Nintendo.
The broader Topix added 0.68% as April core inflation data pointed to renewed price momentum.
In contrast, Chinese equities declined, with the Shanghai Composite down 0.94% and the Shenzhen Component falling 0.85%, weighed by steep losses in Ganso, Beijing Airport High-Tech Park, and Sichuan Xichang Electric Power, each down around 10%.
Hong Kong's Hang Seng Index edged up 0.24% to 23,601.26, supported by modest gains in CSPC Pharmaceutical, WH Group, and EV maker BYD.
South Korea's Kospi 100 slipped 0.06% to 2,592.09 after mixed producer price index data, with Hanwha Solutions dropping 11.41% and Samsung Biologics down nearly 6%.
Australia's S&P/ASX 200 advanced 0.15% to 8,360.90, helped by a 6.02% rise in Perenti Global and gains in tech and defence names.
In New Zealand, the S&P/NZX 50 lost 0.52% to 12,596.50 following weaker-than-expected first-quarter retail sales, with Vista Group, Heartland Group, and Pacific Edge among the biggest fallers.
The dollar was weaker against its major regional pairs, last falling 0.52% on the dollar to JPY 143.26, as its retreated 0.76% against the Aussie to AUD 1.5480, and was off 0.94% from the Kiwi, changing hands at NZD 1.6792.
Oil prices were in the red, with Brent crude futures last down 0.19% on ICE at $64.32 per barrel, and the NYMEX quote for West Texas Intermediate off 0.18% at $61.09.
Economic data paints mixed picture, Japan consumer inflation accelerates
Economic data released across the region on Friday painted a mixed picture of inflation and consumer demand, with Japan seeing renewed price pressures, South Korea showing easing producer inflation, and New Zealand posting stronger retail activity.
Japan's core consumer inflation accelerated to 3.5% in April, exceeding expectations and marking the highest level since January 2023.
The figure, which excludes fresh food prices, strengthened the case for the Bank of Japan to begin unwinding its long-standing ultra-loose monetary policy.
Headline inflation held steady at 3.6%, remaining above the central bank's 2% target for a third consecutive year.
In South Korea, producer price inflation slowed to 0.9% year-on-year in April from 1.3% in March, while prices edged down 0.1% on the month, the first decline since January.
The data suggested easing upstream cost pressures amid a subdued inflationary backdrop.
New Zealand's retail sector showed signs of resilience, with total seasonally adjusted retail sales volume rising 0.8% in the March quarter to NZD 25bn, while the value increased 1.5% to NZD 31bn.
All of the country's 16 regions recorded higher sales values quarter-on-quarter, although retail inventories dipped 1.5% year-on-year to NZD 9.3bn.
Meanwhile, Singapore's core inflation rose 0.7% in April from a year earlier, ahead of the 0.5% increase expected by economists, suggesting slightly firmer underlying price growth in the city-state.
Reporting by Josh White for Sharecast.com.
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