The view of Nanjing Road East Pedestrian Mall, the main shopping street in Shanghai.
Bruce Yuanyue Bi | The Image Bank | Getty Images
Asia-Pacific markets traded mixed as investors assessed the phone call between U.S. President Donald Trump and Chinese President Xi Jinping.
Trump and Xi spoke on Thursday and agreed that officials from the U.S. and China will meet soon to continue negotiations aimed at ending the ongoing trade war.
The call, which Trump described as "very good," lasted for about 90 minutes, focusing "almost entirely" on trade and yielded a "very positive conclusion for both countries," Trump wrote in a Truth Social post.
Japan's benchmark Nikkei 225 rose 0.5% to close at 37,741.61 and the Topix gained 0.47% to close at 2,769.33.
Australia's S&P/ASX 200 was 0.27% lower to end the trading day at 8,515.7. Hong Kong's Hang Seng Index slipped 0.51%, while mainland China's CSI 300 traded flat to close at 3,873.98.
India's Nifty 50 climbed 0.96% after the country's central bank delivered an outsized cut to its benchmark policy rate to 5.5% from 6%. This also marks a third straight rate cut since February, and comes below the median estimates of 5.75% in a Reuters poll.
South Korea markets are closed for a holiday.
"The U.S.‑China agreement to de‑escalate tensions, and the recent phone call between Trump and Xi, shows both countries have an economic 'pain threshold," said Luke Yeaman, chief economist and head of global economics and markets research at Commonwealth Bank.
While the call takes some severe downside scenarios off the table, tensions will remain high and more bouts of escalation are still on the cards, Yeaman wrote in a note published Friday. "In the longer term, both will continue to push for more economic independence."
U.S. futures were mostly calm ahead of a key jobs report that is expected to shed light on the health of the U.S. economy.
Overnight stateside, the three major averages closed lower. The S&P 500 fell, spurred by a drop in shares of electric vehicle maker Tesla. The broad market index dipped 0.53% and closed at 5,939.30, while the Nasdaq Composite pulled back 0.83% to end at 19,298.45. The Dow Jones Industrial Average dropped 108 points, or 0.25%, to settle at 42,319.74.
— CNBC's Pia Singh and Sean Conlon contributed to this report.
Correction: This blog has been updated to reflect that South Korean markets are closed for a holiday.
India's central bank beats market expectations to cut rate to 5.5%
India's central bank delivered an outsized cut to its benchmark policy rate, bringing it to 5.5% from 6%, its lowest level since August 2022.
This also marks a third straight rate cut since February, and comes below the median estimates of 5.75% in a Reuters poll.
The decision comes after a better-than-expected GDP growth figure in its fiscal fourth quarter, with the economy expanding 7.4% year on year, compared to the 6.7% estimated by economists polled by Reuters.
Read the full story here.
—Lim Hui Jie
Record number of Japan curry shops shut down as rice prices bite
A plate of Japanese rice and vegetarian-friendly curry sauce.
Bloomberg | Bloomberg | Getty Images
A record number of curry restaurants in Japan went bankrupt in the past year as soaring rice costs bite. According to Tokyo-based Teikoku Databank, thirteen curry restaurants with liabilities over 10 million yen ($70,000) declared bankruptcy in the fiscal year ending March — the highest figure on record for the second straight year.
Rising prices for key curry ingredients like rice, spices, meat, and vegetables have strained the industry, the report said, adding that the price of curry rice rose to a 10-year high of 365 yen ($2.54) per meal.
The report cited other reasons as well, such as dwindling demand for delivery services and increasing competition.
The actual number of bankruptcies could be even larger if small stores and privately run businesses were factored in, the report showed. The bankruptcies come as locals continue to grapple with skyrocketing prices for Japan's beloved staple.
"The surge in rice prices results from several factors, starting with a mini demand shock and compounded by a complex supply-demand market, pricing issues, and government policy failures," said BMI's senior country risk analyst, Sayaka Shiba.
—Lee Ying Shan
Asia is headed for slower growth and inflation, says Nomura
Asia is expected to enter a phase of below-trend growth and below-target inflation, said Nomura.
While regional headwinds, such as weak external demand, China's overcapacity, and shifting supply chains persist, idiosyncratic dynamics offer selective opportunities, Nomura's economists said in a report.
Below are some key highlights from the report:
- Thailand is slipping into prolonged deflation, with tight financial conditions, weak tourism, and exposure to China's overcapacity fueling a downward spiral.
- India, despite robust Q1 data, is forecast to slow due to softening credit and private capex, with Nomura projecting 100bp in RBI cuts as inflation undershoots the target.
- In Korea, aggressive fiscal expansion under the new president may allow the Bank of Korea to delay rate cuts, with only two modest reductions expected to begin late 2025.
- Malaysia, meanwhile, is set to outperform growth expectations thanks to strong domestic demand and infrastructure momentum, with Bank Negara likely to hold rates steady despite subsidy-related inflation pressures.
—Lee Ying Shan
AIA shares rise to 8-month high after announcing Mark Tucker's return as chairman
Shares of Asian insurer AIA Group rose 3%, the highest since Oct. 8, 2024, following the group's announcement on Friday that HSBC's Mark Tucker would be appointed as chairman.
Tucker, who served as CEO of AIA Group between 2010 and 2017, will begin his new appointment on Oct 1.
HSBC said Brendan Nelson, a board member and chair of its group audit committee, will serve as interim chairman starting October 1. Nelson was a former partner at KPMG.
HSBC shares listed in Hong Kong declined 0.48% after the announcement.
—Lee Ying Shan
China's propensity for overcapacity will fuel its deflationary spiral further, says ANZ
While U.S.-China trade tensions often dominate headlines, ANZ's Greater China chief economist Raymond Yeung said that the real concern lies in sluggish domestic demand, which makes up 88% of the economy.
Despite retail sales nearly doubling total goods exports in recent years, consumer spending remains weak—especially with a subdued property cycle weighing on household confidence, Yeung noted in a report published Friday.
"China will be prone to overcapacity, fueling the deflationary spiral further. The debt-fueled capital investment model will likely weigh on interest rate in 2026-30," he said.
China's reliance on debt-driven capital investment is expected to persist through its 15th Five-Year Plan running from 2026 to 2030, according to the bank.
—Lee Ying Shan
Stocks close lower on Thursday
The three leading indexes finished Thursday's session in the red.
The S&P 500 plummeted 0.53% to close at 5,939.30, while the Nasdaq Composite declined 0.83%, ending at 19,298.45. The Dow Jones Industrial Average shed 108 points, or 0.25%, to finish at 42,319.74.
— Sean Conlon
English (US) ·