Asia report: Most markets join global rally
By Josh White
Date: Wednesday 13 Aug 2025
(Sharecast News) - Asia-Pacific equities mostly rose on Wednesday, following Wall Street higher after softer US inflation data boosted expectations the Federal Reserve could cut interest rates next month.
Patrick Munnelly, market strategy partner at TickMill, noted that US stocks reached a new peak overnight after a steady US inflation report eased worries over prices and increased expectations for a Federal Reserve interest rate cut in September.
"The MSCI All Country World Index rose by 0.2% to an all-time high, reflecting Wall Street's climb to record levels, with money markets nearly fully anticipating a 25 basis point Fed reduction next month," he said.
"An index of Asian equities increased by 1.1%, with the Nikkei 225 hitting a new record and Taiwan's stock market also advancing.
"Shanghai stocks hit their highest point since December 2021."
Munnelly noted that Japan's five-year government bond auction saw its lowest demand ratio since 2020, while the yen declined, and US treasuries and the dollar index remained stable.
"Though US inflation rose to its peak for the year, a modest rise in goods prices mitigated concerns that trade-related costs could lead to wider pricing issues.
"With the CPI report now behind them, investors are turning their attention to Friday's US retail sales data for indications that consumer sentiment aligns with the positive corporate earnings outlook."
Most markets rise after Wall Street's overnight gains
In Japan, the Nikkei 225 gained 1.48% to a record 43,348.50, led by Yokohama Rubber, up 8.29%, Tokyo Electric Power, up 7.13%, and Renesas Electronics, up 6.94%.
The broader Topix rose 0.83% to 3,091.91.
China's mainland markets advanced, with the Shanghai Composite up 0.48% at 3,683.46 and the Shenzhen Component climbing 1.76% to 11,551.36.
Gains were driven by limit-up moves in JiShi Media, Ningbo Jintian Copper Group, and Changzhou Tenglong Auto Parts, all rising just over 10%.
Hong Kong's Hang Seng Index jumped 2.58% to 25,613.67, boosted by CSPC Pharmaceutical Group, up 6.77%, WH Group, up 6.23%, and WuXi AppTec, up 6.19%.
In South Korea, the Kospi 100 rose 1.33% to 3,275.83, led by LG Display's 22.49% surge, while HD Korea Shipbuilding & Offshore Engineering climbed 6.6% and Hanon Systems gained 5.95%.
Australia's S&P/ASX 200 bucked the regional trend, falling 0.6% to 8,827.10, weighed down by AGL Energy, down 13.11%, Beach Energy, off 7.55%, and Pilbara Minerals, down 6.55%.
Across the Tasman Sea, New Zealand's S&P/NZX 50 edged up 0.05% to 12,766.54, supported by Eroad, Restaurant Brands New Zealand, and Argosy Property, which gained 3.85%, 2.04% and 1.75% respectively.
In currency markets, the dollar was last down 0.38% on the yen to trade at JPY 147.28, as it lost 0.45% against the Aussie to AUD 1.5246, and retreated 0.6% from the Kiwi to change hands at NZD 1.6692.
Oil prices were in the red, with Brent crude futures last down 0.51% on ICE at $65.78 per barrel, while the NYMEX quote for West Texas Intermediate slipped 0.66% to $62.75.
Unemployment rate falls in Korea, producer price inflation slows in Japan
In economic news, South Korea's unemployment rate fell to 2.5% in July from 2.6% in June, defying market expectations, but underlying labour market indicators signalled weakness.
The participation rate slipped for a third month to 64.4%, while private sector hiring remained subdued.
Manufacturing employment declined for a second month, and the construction sector had shed jobs in six of the past seven months, a trend expected to weigh heavily on growth.
Economists were expecting the Bank of Korea to maintain a cautious stance in August, awaiting signs of cooling property prices before adjusting policy.
In Japan, producer price inflation slowed to 2.6% year-on-year in July, the weakest pace in a year, with monthly growth at just 0.2%.
The Bank of Japan said softer gains in food, beverages and transport equipment prices, alongside a 0.1% dip in utilities prices, contributed to the moderation.
Import costs fell 5.1% and export prices were down 1.1% in contract currencies, underscoring easing input pressures.
The cooling trend could point to slower consumer price growth ahead.
Business sentiment among Japanese manufacturers improved for a second month in August, with the Reuters Tankan index rising to plus 9 from plus 7, supported by a recent trade deal with the US, though concerns remained over potential tariff impacts.
In Australia, the value of new owner-occupier home loan commitments rose 2.4% quarter-on-quarter in the second quarter of 2025 to AUD 54.7bn, reversing a 1.8% fall in the first quarter.
First-home buyer loans increased 5.7%, while non-first-home buyer loans rose 4.4%.
On an annual basis, owner-occupier lending jumped 7.4%. Investment lending for homes grew 1.4% on the quarter to AUD 32.9bn, up 6.9% from a year earlier.
New Zealand's retail card spending rose 0.2% in July, marking a second consecutive monthly increase, though momentum remained fragile.
Core spending, excluding fuel and vehicles, was flat.
Consumables, motor vehicles and hospitality posted modest gains, while apparel and durable goods fell.
Compared with a year earlier, retail sales were up 1.7%, the first annual rise since January, though not adjusted for inflation.
Reporting by Josh White for Sharecast.com.
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