Asia report: Japan leads losses as Toyota, Nintendo flag weakness

Stock markets in the Asia-Pacific region were in a mixed state on Thursday, with Japan’s markets leading the decliners, as investors thumbed through a series of earnings reports from the region.

Attention was also turning to China’s April trade data and Japan’s March pay numbers, both scheduled for release on Thursday.

“Overnight, equity markets experienced a period of consolidation following recent increases, with the Asia-Pacific region showing a general softening,” said TickMill market analyst Patrick Munnelly.

“The absence of significant economic data releases yesterday led to attention being drawn to hawkish remarks from the Fed's Kashkari, who suggested that an uptick in policy interest rates might occur, although he also emphasised that such a move is not the most probable scenario.”

Munnelly noted that Japanese stocks fell after a lower profit estimate from Toyots, and a bleak outlook from Nintendo.

“Mainland Chinese and Hong Kong equities paused as investors awaited significant tech earnings next week.

“Treasury rates rose, boosting the dollar for a third day, despite warnings from the central bank governor.

“[Bank of Japan] governor Kazuo Ueda warned financial markets about a possible policy change, and [Japan’s] finance minister Shunichi Suzuki stated that the administration is ready to take necessary action.”

Japan leads losses on mixed day for region

Japan stocks took a hit, as the Nikkei 225 dropped by 1.63% to 38,202.37, while the Topix fell by 1.45% to 2,706.43.

Leading the declines on Tokyo’s benchmark was AGC, down by 10.14%, Mitsubishi Heavy Industries by 7.3%, and Ricoh by 6.16%.

In China, the Shanghai Composite dipped 0.61% to 3,128.48, while the Shenzhen Component slid by 1.35% to 9,638.82.

Companies like Beijing Dalong Weiye Real Estate Development and BEH Property experienced significant drops of 6.91% and 6.28% respectively.

Hong Kong's Hang Seng Index saw declines of 0.9% to 18,313.86, led lower by Longfor Properties, Country Garden Services, and China Resources Land, which recorded respective losses of 7.56%, 5.68%, and 4.88%.

South Korea's Kospi, however, managed to buck the trend with a modest increase of 0.39% to 2,745.05.

Notable gainers in Seoul included KB Financial Group, up by 5.14%, and Korea Investment Holdings, which rose by 4.7%.

In Australia, the S&P/ASX 200 edged up by 0.14% to 7,804.50, led higher by Pinnacle Investment Management Group and Lifestyle Communities, rising by 6.68% and 5.06% respectively.

Meanwhile, New Zealand's S&P/NZX 50 slipped by 0.15% to 11,782.89, with Pacific Edge and Spark New Zealand recording respective losses of 7% and 2.27%.

In currency markets, the dollar was last 0.38% stronger on the yen to trade at JPY 155.28, as it gained 0.44% against the Aussie to AUD 1.5224, and advanced 0.23% on the Kiwi to change hands at NZD 1.6699.

Oil prices saw a decline, with Brent crude futures last down 1.13% on ICE at $82.22 per barrel, and the NYMEX quote for West Texas Intermediate falling 1.25% to $77.40.

Toyota, Nintendo both forecast weaker year ahead

Earnings were in focus in the region on Wednesday, amid a lack of major economic updates.

Toyota Motor Corporation projected a decrease in its operating profit for the current financial year, anticipating an operating income of JPY 4.3trn for the 12 months ending March 2025, marking a decline of about 20% from the prior year's JPY 5.35trn.

Toyota announced plans to invest JPY 380bn, while also focusing on improving the work environment for its employees.

Meanwhile, Japanese video game giant Nintendo unveiled its fourth-quarter results and hinted at the successor to its flagship Switch console in the coming financial year.

For the 12 months ending March 2025, Nintendo forecast net sales of JPY 1.35trn and net profit of JPY 300bn, reflecting a 39% year-on-year decrease in net profit, a figure notably lower than analyst expectations according to LSEG estimates.

Although Nintendo's fourth-quarter results generally surpassed analysts' projections, revenue fell short, recording JPY 277.1bn in sales compared to the expected JPY 280.6bn.

In Singapore, United Overseas Bank (UOB) reported a first-quarter net profit of SGD 1.47bn (£0.87m), marking a 2% decrease compared to the same period last year.

Despite the decline, UOB's performance still exceeded analyst expectations, with a mean estimate of SGD 1.43bn according to LSEG polling.

The bank noted a 2% easing in net interest income, primarily attributed to lower net interest margins compared to the prior year.

However, UOB highlighted a 5% year-on-year growth in net fee income to SGD 580m, driven by various sources including loan-related, wealth management, and credit card fees.

Reporting by Josh White for Sharecast.com.