Asia report: Markets mixed as investors look to China policy summit

Asia-Pacific markets ended mixed on Wednesday, as investors awaited the outcome of China’s annual economic work conference.

Market participants were also looking towards a key inflation reading in the US that could influence the Federal Reserve’s upcoming interest rate decision.

“Asian markets declined as investors awaited key US inflation figures to assess whether the Federal Reserve will lower or maintain interest rates in the upcoming week,” said TickMill partner Patrick Munnelly.

“China's top policymakers are currently engaged in discussions regarding the potential decision to permit the yuan to depreciate in 2025.

“This consideration arises in the context of the impending tariffs imposed by [US president-elect Donald] Trump, which are expected to have significant implications for trade and economic relations.”

Munnelly noted that according to “sources familiar with the matter”, the weakening of renminbi could be a strategic move to mitigate the adverse effects of those tariffs on China's economy.

“The policymakers are weighing the benefits and risks associated with such a move, as a weaker yuan could enhance the competitiveness of Chinese exports but may also lead to increased tensions with the United States and other trading partners.”

Markets mixed as investors look to China policy summit, US inflation

In Japan, the Nikkei 225 edged up marginally by 0.01% to close at 39,372.23, while the Topix rose 0.29% to 2,749.31.

Gains on Tokyo’s benchmark were led by Kawasaki Heavy Industries, which surged 10.28%, and IHI Corporation, up 6.25%, reflecting strength in the industrial sector.

Chinese markets saw modest gains as the Shanghai Composite climbed 0.29% to 3,432.49 and the Shenzhen Component added 0.33% to close at 10,848.42.

Espressif Systems Shanghai soared 20%, while Shanghai Shibei Hi-Tech and Jilin Yatai Group each advanced over 10%, indicating robust investor interest in key technology and high-growth sectors.

In Hong Kong, the Hang Seng Index dropped 0.77% to 20,155.05, dragged down by property and tech stocks.

Hang Lung Properties and Techtronic Industries declined 3.7% and 3.62%, respectively, while JD.com fell 2.8%.

South Korea’s Kospi 100 outperformed the region, climbing 0.85% to 2,443.71, as SK Bioscience surged 16.4%, and Hanmi Semiconductor gained 13.94%.

In Australia, the S&P/ASX 200 fell 0.47% to 8,353.60, as losses in mining and energy weighed on the index.

Clarity Pharmaceuticals dropped 5.83%, while Contact Energy and South32 fell 5.76% and 4.35%, respectively.

New Zealand’s S&P/NZX 50 rose 0.3% to 12,761.19, supported by gains in AIAL, Vista Group International, and the Fonterra Shareholders Fund, each rising just under 2%.

In currency markets, the dollar was last 0.31% stronger on the yen, trading at JPY 152.42, as it gained 0.46% against the Aussie to AUD 1.5752, and advanced 0.35% on the Kiwi, changing hands at NZD 1.7304.

Oil prices advanced, with Brent crude futures last up 0.9% on ICE at $72.84 per barrel, and the NYMEX quote for West Texas Intermediate rising 0.93% to $69.23.

Korean president could be detained by corruption office, wholesale inflation hastens in Japan

In political developments, South Korea's corruption investigation office announced on Wednesday that it could seek the detention and arrest of president Yoon Suk Yeol if certain conditions were met.

The announcement followed reports of a police raid on the presidential office, tied to an investigation into Yoon's brief imposition of martial law last week.

Meanwhile, South Korea’s unemployment rate held steady in November at a seasonally adjusted 2.7%, according to Statistics Korea.

The figure remained unchanged from October, reflecting stability in the labour market despite growing economic challenges.

In Japan, wholesale inflation accelerated for the third consecutive month in November, with the producer price index (PPI) rising 3.7% year on year, surpassing expectations of 3.4%.

The increase, up from October’s revised 3.6%, suggested persistent price pressures and could strengthen the argument for the Bank of Japan to raise interest rates at its policy meeting concluding on 19 December.

Reporting by Josh White for Sharecast.com.