Asia Market Quick Take – October 6, 2025

Asia Market Quick Take – October 6, 2025 

Key points:  

• Macro: Japan’s LDP elects Sanae Takaichi as leader, likely to be first female PM 
• Equities: US equities stall; Palantir and Tesla falls 
• FX: JPY falls after Sanae Takaichi elected as leader 
• Commodities: Gold notches another high amidst US govt. Shut down 
• Fixed income: Yields tick higher amid US shut down and delayed data release 

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Disclaimer: Past performance does not indicate future performance.  

 Macro:  

• Japan’s ruling LDP elected Sanae Takaichi as leader, poised to become the first female PM. She emphasized swift support for small businesses, farms, and the medical sector. Takaichi proposed increased local government subsidies, eliminating the extra gasoline tax, and reducing diesel fuel costs. She is considering lowering the consumption tax and pledging to honor US agreements. 
• The ISM Services PMI fell to 50 in September 2025 from 52 in August, below the 51.7 forecast, indicating a stall. Business activity remained stable, new orders slowed, and inventories contracted. Employment continued in contraction due to delayed hiring and staffing challenges. Price pressures intensified, with the index at 69.4, its second-highest since October 2022. Supplier delivery rates were the slowest since February, while backlog contraction eased. Ten industries grew, two fewer than August, as the number contracting rose to seven. 
• Trump blamed Democrats for the shutdown and potential layoffs, while NEC Director Hassett said mass federal layoffs will start if Trump views shutdown talks as unproductive. 

Equities:  

• US stocks stalled, surrendering earlier record-setting gains as tech weakness weighed: the S&P 500 was flat after five up days, the Nasdaq 100 fell 0.4%, the Dow rose 0.5% and the Russell 2000 added 0.5%, while the VIX hovered near 16.6. Palantir slumped on reports of serious flaws in its battlefield communications system, and Tesla fell despite record quarterly sales. Breadth improved, with the equal‑weight S&P 500 up 0.3% for a sixth straight session and the Russell 2000 outperforming. Valuations remain elevated versus history: small caps trade about 7% above their average since 1985, mid caps 25%, large caps 44% and Russell Top 200 mega caps more than 50%. Crypto‑linked stocks climbed as Bitcoin neared an all‑time high amid shutdown‑related haven demand; pharmaceuticals rallied on a US drug‑pricing and tariff deal; Macau‑exposed casinos slipped on weaker‑than‑expected Golden Week travel data flagged by Citi. In tech, Applied Materials slid after flagging a $600 million hit to fiscal 2026 net revenue from a new BIS rule, while Apple dipped on a rare Jefferies downgrade citing stretched iPhone upgrade expectations. 

Earnings this week: 

Asia 

• Monday: Create SD Holdings, Nextage, Tosei, Ichibanya
• Tuesday: Pal Group, Life, San-A, Sakata Seed
• Wednesday: ABC-Mart, Welcia
• Thursday: TCS, Fast Retailing, Seven & I, Sugi Holdings, Aeon Financial Service
• Friday: Zhaojin Mining, Ryohin Keikaku, Tsuruha Holdings, Rorze, Bic Camera 

Outside Asia 

• Monday: Constellation Brands
• Tuesday: Qatar National Bank, Almarai, Ooredoo, Penguin Solutions, CVS Group
• Wednesday: AZZ
• Thursday: PepsiCo, Levi Strauss, Aritzia, Applied Digital, Suedzucker
• Friday: Tryg, Atrium Ljungberg, Transcorp Power, Gerresheimer 

FX: 

• The yen fell against all majors after Sanae Takaichi’s weekend win in the LDP leadership race stoked expectations of pro‑stimulus policy, concerns over increased JGB supply and reduced odds of further BoJ hikes.  
• USDJPY jumped as much as 1.5% to 149.62, while EURJPY rose 1.3% to 175.44, a fresh record level.  
•  The dollar strengthened against all G‑10 peers: GBPUSD fell 0.4% to 1.3431, EURUSD slipped 0.2% to 1.1716 and AUDUSD eased 0.2% to 0.6589. In France, President Emmanuel Macron’s broadly unchanged cabinet drew immediate opposition backlash, undermining Prime Minister Sebastien Lecornu’s prospects ahead of a make‑or‑break week in parliament. 
•  The Australian dollar rose to its strongest in over eight months against the yen after Japan’s ruling party elected pro‑stimulus Sanae Takaichi, with AUDJPY up as much as 1.2% to 98.533, the highest since 27 January.  
•  Broader dollar strength saw AUDUSD and NZDUSD slip 0.2% to 0.6589 and 0.5821, respectively, while NZDJPY climbed as much as 1.2% to 87.015, the highest since 19 September. Separately, NZIER said a majority of the RBNZ Shadow Board recommends a 25bp cut this week. 

Commodities: 

• Oil advanced after OPEC+ approved a modest supply increase, easing fears of a supersized hike. Brent rose above $65 a barrel and WTI hovered near $61 after OPEC and partners including Russia agreed on Sunday to lift output by 137,000 barrels a day, well below the larger figures floated beforehand. 
• Gold notched another record at the start of the week as haven demand built amid the US government shutdown, rising to $3,920.63 an ounce before easing. The shutdown has delayed Friday’s US payrolls report, further clouding an already murky economic outlook. 

Fixed income:  

• US Treasuries cheapened into Friday’s close, with yields near session highs and 2–4bp higher across the curve as few catalysts beyond a mixed early‑September ISM services print left a steady grind higher; in SOFR options, a couple of condor structures sought to pin year‑end pricing around two cuts, while losses were led by the belly, with 7‑year yields up roughly 4bp. JGBs face a volatile open after pro‑stimulus Sanae Takaichi’s LDP leadership win fuelled bets the BoJ will delay rate hikes; 10‑year JGB futures ended the night session 3 ticks lower at 135.88, and Australia’s cash bond market is shut for a New South Wales holiday. 

For a global look at markets – go to Inspiration.  

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