Asia Market Quick Take – 08 September 2026

Key points:

• Macro: Iran says an agreement with Oman is near regarding shipping via SoH
• Equities: Asian equities rally on semiconductor and AI optimism; Japan, Korea outperform
• FX: Yen jumps to below 154 against USD on carry unwinds, BOJ hike expectations
• Commodities: Copper hit a record on the LME while oil remains elevated
• Fixed income: Cash Treasury trading resumes with global bonds under pressure

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Disclaimer: Past performance does not indicate future performance.

Macro:

• Iran said a shipping-management deal with Oman for the Strait of Hormuz was near, heightening concern over its control of the chokepoint. Oil surged nearly 10% last week as renewed US-Iran clashes, including US strikes on Iranian tankers and attacks on ships and military targets around Hormuz, stoked supply fears. Saudi Aramco’s Jazan facilities were also hit again with limited damage, though about 7 million barrels a day still transit the strait.
• Japan’s GDP grew 0.4% q/q in Q2 2026, above the 0.3% flash estimate and matching expectations. It was the third straight quarter of growth, driven by stronger government spending and a smaller-than-expected decline in business investment.
• Japan’s average cash earnings rose 4.7% y/y in August 2026, beating forecasts (3.9%) and marking the fastest gain since January 1997. Regular pay climbed 4.1% and bonuses 6.3%, while real wages increased 2.4% y/y, the strongest since May 2021. Wage growth was led by construction, mining, transport and postal services, IT, and manufacturing, with education the only major sector to see a decline.
• UK like-for-like retail sales rose 0.5% y/y in August, down from 1% in July and the weakest since October 2024. Total sales growth slowed to 0.7%. Food sales rose 2.6%, non-food fell 0.8% as earlier heatwaves pulled forward spending and big-ticket items weakened. Barclays reported consumer spending up 2.1% y/y, while confidence slipped to 26% from 30%.
• Singapore retail sales rose 1.5% y/y in July 2026, down from 4% and the weakest since May 2025. Most categories slowed or fell, except recreational goods and watches and jewelry. Excluding vehicles, sales also grew 1.5% y/y, while seasonally adjusted sales rose 0.9% m/m, unchanged from June.

Equities: 

• US equity markets were closed Monday for Labor Day. On Friday, the S&P 500 closed approximately 0.4% lower as the blowout payrolls report lifted rate-hike bets and weighed on most sectors. The Nasdaq 100 edged up 0.2%, supported by a 3.4% surge in the Philadelphia Semiconductor Index on AI optimism following OpenAI's GPT-6 (Astra) announcement. S&P 500 futures are pointing lower Tuesday as oil prices push toward $98.
• European stocks were subdued on Monday, with the Stoxx 600 finishing little changed at around 649 after erasing an earlier decline of up to 0.4%. Energy stocks outperformed (+1.2%) on higher oil, while real estate and insurance lagged. Novartis fell 2.6% after a heart drug failed a final-stage clinical study. Nordex surged 12% after a BofA upgrade to Buy. SigmaRoc rose as much as 13% on interim results. German political risk weighed after the AfD's strong state election showing, with Bund yields rising 2bps to 3.36%.
• Asian equities rallied strongly on Monday, led by semiconductors tracking Friday's US gains and AI optimism around OpenAI's GPT-6. The MSCI Asia Pacific Index rose 1.9%, its best day in a month. South Korea's Kospi surged 4.6%, with Samsung Electronics up 5.7% and SK Hynix up 8.3%. Japan's Nikkei 225 gained 2.1% to 66,399, led by Kioxia, Advantest, and Tokyo Electron; Kokusai Electric jumped 11% and JX Metals rose 6.2% after Nikkei 225 index inclusion announcements. Taiwan's Taiex also advanced, approaching record highs on TSMC strength. Hong Kong's Hang Seng dipped 0.9%, with Z.AI falling as much as 6.4% for a fifth straight day. Australia's ASX 200 edged up 0.1% to 9,010, with energy stocks leading. Looking ahead to Tuesday's open, futures for Japan, Australia, and Hong Kong point lower as oil and yen strength weigh; South Korea futures signal gains tracking Nasdaq 100 contracts.

Earnings this week:

• Wednesday: Inditex, GameStop, Apple IPhone event
• Thursday: Adobe, Oracle

FX:

• Monday’s FX session saw mild, broad-based USD weakness in thin US holiday liquidity, with the yen dominating moves.
• JPY surged past 154 per dollar, its strongest since February and a sharp rebound from July’s 40-year low, with USDJPY sliding from 156.04 to a 153.54 low. The move was driven by unwinding carry trades, stops below 155, yen short-covering, and speculation of greater GPIF domestic allocation, alongside expectations of BOJ tightening under US pressure. Markets now see a hike as soon as this month, with a PM adviser flagging one by September and another by January, while the fastest wage growth since 1997 supports a more hawkish BOJ; traders are eyeing 152–152.27 as the next downside target.
• EURUSD traded between 1.1607 and 1.1636, closing at 1.1623, supported by expectations of an ECB rate hike.
• GBPUSD rose from 1.3513 to 1.3541 (range 1.3506–1.3548), though overbought signals and a completed DeMark Sell Countdown suggest rallies may meet selling interest.
• AUDUSD consolidated near a four‑month high, closing at 0.7218 after touching 0.7225 (range 0.7196–0.7225), helped by stronger oil, copper, and iron ore. NZDUSD closed at 0.5879 (range 0.5866–0.5889), holding in the upper half of the day’s action.
• KRW advanced nearly 1% against the dollar to 1,337.70, its strongest since October 2024, driven by the Kospi surge and heavy foreign equity inflows of 597.3 billion won.

Commodities:

• Brent crude briefly topped $98 a barrel on Monday, its highest in six weeks, following the largest US-Iran tanker exchange yet and reports of hits on Saudi oil infrastructure. Prices partially retraced after Iran signalled an imminent deal with Oman on Hormuz shipping routes. OPEC+ kept October output unchanged. WTI traded around $91–$92.
• Gold traded near $4,400 an ounce on Monday, edging lower as traders weighed volatile oil prices and the Fed rate-hike risk following Friday's payrolls beat. The PBOC added the most gold to its reserves since 2023 in August, extending its buying streak to 22 consecutive months.
• Copper hit a record on the LME as 3-month futures rose up to 0.8% to $14,533/ton on expectations President Trump will expand US tariffs to refined metal, before paring some gains.

Fixed income:

• Cash Treasury trading resumes today after Monday's US holiday closure. The 10-year yield stood at 4.78% as of Friday's close, up 1bp on the payrolls data. A heavy auction week lies ahead ($58bn 3-year, $39bn 10-year, $22bn 30-year), and bond markets face what strategists describe as an extended "pain trade" as blowout payrolls collide with inflation data and Fed uncertainty. SocGen's Bokobza flagged 5.5% on the 10-year as the threshold that would begin to crack equity valuations.
• European bond yields rose Monday as energy-driven inflation fears and the AfD's German state election result weighed on sentiment. German 10-year Bund yields rose 2bps to 3.36%. UK gilts also faced pressure, with the FTSE slipping as traders priced in rate hikes from both the Fed and the Bank of England. Japan likely sold US Treasuries to fund its record yen intervention, with Tokyo's foreign securities holdings falling a record $87.8 billion in August.
• Investment-grade dollar bond spreads in Asia and the US widened slightly last week. Dealers expect approximately $70 billion of US high-grade issuance this week, with Asian supply also expected to accelerate. Markets remain focused on US CPI and PPI data as the key determinants of the September Fed decision.

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