Asia report: Nikkei slides as Japan household spending contracts
By Josh White
Date: Friday 05 Dec 2025
(Sharecast News) - Asia-Pacific markets traded mixed on Friday after a subdued session on Wall Street, where the major US averages ended without clear direction.
Patrick Munnelly at TickMill said the region "took a hit after a lacklustre performance on Wall Street, which weighed heavily on tech stocks and US Treasuries," adding that "investors are now eagerly awaiting the release of critical US inflation data later today."
He noted that although sentiment weakened, the MSCI Asia-Pacific index "remained poised for its second straight weekly gain."
Regional sentiment diverged as investors weighed weak domestic data in Japan against continued strength in Chinese technology and resources-linked shares in Australia.
Munnelly said "the dip in equities underscored lingering fragility in risk appetite, even as global markets have rebounded over the past two weeks, coming within 1% of the record highs set in late October."
Tokyo benchmark slides as household spending contracts
Japan's Nikkei 225 fell 1.05% to 50,491.87 and the Topix slipped 1.05% to 3,362.56 after household spending unexpectedly contracted, adding to uncertainty over the Bank of Japan's policy trajectory.
Spending declined 3.0% year on year in October, sharply missing expectations for a 1.1% rise, and plunged 3.5% month on month despite forecasts for growth.
The drop marked the steepest annual decline since January 2024 and the first in six months.
Officials warned it was unclear whether the setback was temporary.
The figures complicated expectations of a near-term rate hike, following comments from governor Kazuo Ueda that the Bank of Japan would assess the "pros and cons" of further tightening.
Munnelly said "Japanese stocks, which had surged the previous day, led the regional decline," while noting that "the Japanese yen strengthened against the US dollar, while Japanese bond futures declined amid reports that Bank of Japan officials are ready to hike interest rates at their upcoming policy meeting, provided no significant economic or market disruptions occur beforehand."
Corporate declines deepened losses, with Trend Micro tumbling 8.92% after publishing a report warning AI-driven scams would scale dramatically in 2026, while Bridgestone fell 4.68% and GS Yuasa dropped 4.56%.
China stocks advance, Korea moves higher
Chinese equities advanced - the Shanghai Composite gained 0.7% to 3,902.81, while the Shenzhen Component rose 1.08% to 13,147.68.
The debut of Moore Threads, often described as 'China's Nvidia', dominated trading after its shares surged more than 400% on the Shanghai Stock Exchange following a $1.1bn listing.
Gains extended to other technology and industrial names, including Xi'an Bright Laser Tech, Guangdong Meiyan Jixiang Hydropower and Guizhou Chitianhua, all up more than 10%.
Hong Kong's Hang Seng Index rose 0.58% to 26,085.08, supported by strong moves in Ping An Insurance, which climbed 6.71%, China Life Insurance, up 5.46%, and Baidu, which added 5.01%.
Investor focus centred on Kunlunxin, Baidu's AI chip unit, which was planning a Hong Kong IPO after a fundraising round valued it at CNY 21bn (£2.23bn), underscoring Beijing's push to develop domestic semiconductor capacity amid tighter US restrictions.
Munnelly said the recent rally in Asian tech shares had been "fuelled by easing concerns over tech stock valuations and growing optimism that the Federal Reserve will lower interest rates by 25 basis points at its final meeting of the year next week."
South Korea's Kospi climbed 1.78% to 4,100.05, led by near-limit gains in Dongyang Express, Kolon Mobility Group and Nam Kwang Construction, all rising close to 30%.
Resources drive Sydney gains, Wellington in the red
Australia's S&P/ASX 200 added 0.19% to 8,634.60 as lithium miners and battery metals producers drove the materials sector higher.
IGO rallied 7.11%, Whitehaven Coal rose 6.25% and Liontown Resources gained 4.76% after UBS lifted price forecasts for key commodities.
Munnelly noted that despite pockets of strength, the broader tone showed "lingering fragility in risk appetite" as markets awaited direction from upcoming central bank decisions globally.
New Zealand lagged - the S&P/NZX 50 slipped 0.23% to 13,483.99, weighed down by declines in Synlait Milk, Stride Property and SkyCity Entertainment Group, which fell 2.84%, 2.48% and 2.35% respectively.
Dollar mixed as oil prices ease
In currency markets, the dollar strengthened slightly against the yen, last trading up 0.07% at JPY 155.21, while it weakened against its Australian and New Zealand counterparts, down 0.4% on the former at AUD 1.5068 and 0.21% lower against the latter to change hands at NZD 1.7320.
Munnelly said "the US dollar index continued its slide in Asian trading on Friday, heading for its fourth weekly decline in five weeks," adding that Bitcoin "slipped below 93k, while precious metals like gold and silver saw gains."
Oil prices eased, with Brent crude futures last down 0.27% on ICE at $63.09 per barrel and the NYMEX quote for West Texas Intermediate 0.34% lower at $59.47.
Reporting by Josh White for Sharecast.com.
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