Asia report: Japan rebound leads regional gains

Markets across the Asia-Pacific region showed mixed performances on Tuesday, with Japan leading the charge after a historic rebound in its stock market.

The gains came after a sharp sell-off in Tokyo in the prior session, which saw both the Nikkei and the Topix drop over 12%.

“Despite the generally negative cues from global markets overnight, Asian stock markets are mostly up on Tuesday,” said TickMill market analyst Patrick Munnelly.

“This is because most markets recovered strongly from the worst sell-off since 2008 amid concerns about the world's largest economy going into recession in the wake of some recent disappointing data on US jobs and manufacturing activity.

“After printing the largest losses since 1987,the Japanese stock market surged on Tuesday, reversing some of the sharp losses in the previous three sessions.”

Munnelly noted that the Nikkei was up 3,000 points to be “well above” the 34,000 level, with strong gains across all sectors led by index heavyweights and technology stocks.

“Remarkably, given the convergence of events that sparked the selloff, Japan's rate hike, an unwinding of global transactions financed by yen, weakening in US jobs, and concerns in the Middle East, all it took was a reassuring statement from central bank officials to turn things around.”

Most markets rise as Japanese stocks rebound from dire Monday

In Japan, Nikkei 225 surged by 10.23%, closing at 34,675.46, marking its best single-day percentage gain since October 2008 and the highest point increase on record.

The broader Topix index also jumped 9.3% to finish at 2,434.21.

A number of stocks saw significant gains, with Japan Steel Works climbing 23.16%, Kikkoman rising 20.78%, and Mitsubishi Heavy Industries up 19.84%.

China’s markets were more subdued, with the Shanghai Composite edging up 0.23% to 2,867.28 and the Shenzhen Component rising 0.82% to 8,463.86.

Leading gainers in Shanghai included Hubei Mailyard and GEN S Power Group, both up by more than 10%.

Hong Kong’s Hang Seng Index, however, dipped by 0.31% to 16,647.34, driven down by losses in major companies such as China Life Insurance, down 4.54%; Budweiser Brewing Company, off 4.22%; and Sands China, which lost 4.03%.

In South Korea, the Kospi gained 3.3%, closing at 2,522.15, with top performers including Kumyang, which soared 15.15%, and EcoPro Materials, up 10.93%.

Australia’s S&P/ASX 200 saw modest growth, rising 0.41% to 7,680.60.

Clarity Pharmaceuticals led the gains with a 7.21% increase, followed by Mercury NZ and Paladin Energy, which rose 3.74% and 3.73% respectively.

New Zealand’s S&P/NZX 50, however, declined slightly by 0.15%, closing at 12,245.76, with Manawa Energy dropping 3.6% and Oceania Healthcare falling 2.6%.

In currency markets, the dollar was last up 0.31% on the yen to trade at JPY 144.63, while it gained 0.22% against the Aussie to AUD 1.5424, and advanced 0.31% on the Kiwi to change hands at NZD 1.6886.

Oil prices remained relatively stable, with Brent crude futures nearly unchanged on ICE at $76.29 per barrel, and the NYMEX quote for West Texas Intermediate ticking up by 0.1% to $73.01.

RBA keeps interest rates on hold, household spending slide in Japan

In economic news, the Reserve Bank of Australia (RBA) maintained its cash rate at 4.35% on Tuesday, aligning with economists' expectations.

The decision came as inflation remained above the midpoint of the RBA’s target for the 11th consecutive quarter.

Despite the inflation concerns, the RBA slightly revised its GDP growth forecast for the year ending in December, increasing it to 1.7% from its previous estimate of 1.6% made in May.

In contrast, the consumer price index (CPI) forecast was adjusted downward to 3.0%, a reduction from the earlier projection of 3.8%.

In Japan, June's household spending figures revealed a larger-than-anticipated decline, with spending dropping 1.4% year-on-year in real terms.

Despite that, the average monthly income per household saw a 3.1% increase in real terms from the prior year.

Additionally, real wages in Japan experienced a 1.1% growth in June compared to the same period last year, marking the first rise in 26 months.

The wage growth could provide the Bank of Japan with greater flexibility to consider tightening its monetary policy.

Reporting by Josh White for Sharecast.com.