Asia-Pacific markets experienced a dip on Wednesday as traders carefully considered key economic data from Japan and South Korea. The market mood was further influenced by anticipation of the upcoming US inflation report, a crucial indicator for global markets.
While Wall Street’s major indices rose ahead of the US inflation report, Asian markets faced a downward trend. In South Korea, the unemployment rate dropped to a record low of 2.4% in August, highlighting the resilience of the country’s economy. However, Japan painted a different picture. The latest Reuters Tankan survey indicated a significant decline in business confidence among major manufacturers. The survey, a monthly gauge of business sentiment, showed a drop to plus 4 in September, down from plus 10 in August, marking a seven-month low. Non-manufacturing confidence also declined for the third consecutive month.
Amidst these developments, Bank of Japan board member Junko Nakagawa suggested that the central bank is prepared to raise interest rates if inflation and economic conditions align with its forecasts. This news prompted the Japanese yen to strengthen, reaching its highest level against the US dollar since January.
Global investors were also closely watching the outcomes of the recent US presidential debate between Republican nominee Donald Trump and Democratic Vice President Kamala Harris. The potential impact of the political climate in the US on global markets remained a key area of focus, particularly as the candidates have not yet confirmed a second debate before Election Day.
In corporate news, Japanese retail giant Seven & i found itself under scrutiny following reports from Reuters that the Federal Trade Commission (FTC) might investigate its proposed acquisition of Canada’s Alimentation Couche-Tard. Seven & i had previously rejected the proposal due to concerns over US antitrust issues. This development weighed heavily on the company’s shares, leading to a nearly 2% drop in early trading.
Taiwan Semiconductor Manufacturing Company (TSMC), a leading chipmaker, reported August revenues of 250.87 billion New Taiwan Dollars ($7.8 billion), representing a 33% year-on-year increase but a slight 2.4% decline compared to July. Despite the strong annual growth, TSMC’s shares experienced a marginal dip following the release of the monthly revenue figures.
Overall, Asia-Pacific markets remained under pressure as economic data and corporate developments continued to shape sentiment. Investors will continue to closely watch the evolving economic landscape, especially in the United States, as it influences global market trends.
