Precise Investors Editorial Team
Nikkei 225 dropped 0.5% to 49,066.75 points, Shanghai Shenzhen CSI 300 edged 0.2% lower, Hang Seng index dropped 0.5%, while S&P/ASX 200 shed 0.9%
Asian stock markets dropped on Wednesday after two days of sharp gains, as weakness in technology stocks weighed, while investors assessed Japan’s latest trade data and first policy signals from new Prime Minister Sanae Takaichi’s government.
Japan’s trade figures released on Wednesday showed that exports rose for the first time in five months, but fell short of market forecasts. Imports climbed sharply above expectations, resulting in an unexpected trade deficit of 234.6 billion yen ($1.54 billion).
Today’s trade data was overall positive for growth. The weakness of US exports was more than offset by strong demand from the rest of the world, ING analysts said in a note.
We cautiously expect the gradual normalisation of exports to the US in the near term, they added.
Political developments in Tokyo also drew market attention after Sanae Takaichi was formally sworn in as Japan’s first female prime minister on Tuesday.
Her 19-member cabinet includes Finance Minister Satsuki Katayama and Foreign Minister Toshimitsu Motegi, while Shinjiro Koizumi was appointed as defense minister.
Takaichi has pledged to revive “Abenomics-style” policies centred on fiscal stimulus and economic security, but investors are cautious about the government’s ability to balance growth initiatives with Japan’s heavy public debt load.
She will have to confront a variety of challenges, such as addressing inflationary pressures, managing regional geopolitical tensions, and navigating ongoing domestic political instability, ING analysts said.
Nikkei 225 dropped 0.5% to 49,066.75 points on Wednesday after jumping to a record high of 49,945.5 points in the previous session. The broader TOPIX index traded slightly higher.
Shanghai Shenzhen CSI 300 edged 0.2% lower, while the Shanghai Composite index also ticked down.
Hang Seng index dropped 0.5%, with the Hang Seng TECH sub-index dropping 0.8%.
S&P/ASX 200 shed 0.9%, while Straits Times Index was largely unchanged.
Bucking the trend, KOSPI gained 0.4%, remaining below record highs reached in the previous session.
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