Asia Market Quick Take – October 7, 2025

Asia Market Quick Take – October 7, 2025

Key points:

• Macro: French Prime Minister Lecornu resigns
• Equities: AMD rallies 23.7% after deal with OpenAI
• FX: Yen holds heavy losses after worst open in 35 years
• Commodities: Gold extends gains setting a fresh record near $4,000
• Fixed income: US Treasuries cheapened in a bear steepener

------------------------------------------------------------------

Disclaimer: Past performance does not indicate future performance.

Macro:

• Japan's household spending rose 2.3% in August 2025, exceeding the 1.2% forecast and July's 1.4% increase. It marked four months of growth, helped by government measures. Spending increased in areas like fuel and education, but decreased for food and housing. Monthly spending rose 0.6%, above the 0.1% forecast, yet slower than July's 1.7%.
• French Prime Minister's resignation raised concerns about managing fiscal deficits. In Japan, the yen weakened after Sanae Takaichi's election as LDP leader, with expectations of increased fiscal stimulus. Meanwhile, the US government shutdown continued, as Senators repeatedly failed to pass a spending plan. They are set to vote again on Monday on funding proposals.
• Australian consumer confidence fell to a six‑month low in October as firm inflation dimmed rate‑cut hopes; Westpac’s index dropped 3.5% to 92.1, its 44th month below 100 with pessimists outnumbering optimists.
• Trump signalled willingness to negotiate with Democrats on health care subsidies to end the shutdown, but later said talks would only happen after the government reopens.

Equities: 

• US - Stock futures dipped as the government shutdown persisted into its seventh day following Senate rejection of funding proposals. Despite political tensions, the S&P 500 and Nasdaq reached record highs, while the Dow ended a six-day winning streak. Gains were fueled by AI deals and anticipated Federal Reserve rate cuts. AMD surged 23.7% after announcing a multi-year deal with OpenAI, which may acquire a 10% stake. Major tech stocks like Tesla, Microsoft, and Palantir also rose.
• Japan - Nikkei 225 surged 4.75% to 47,945, and the Topix Index rose 3.1% to 3,225, both hitting record highs. This followed Sanae Takaichi's victory in the LDP leadership race, poised to be Japan's next PM, known for fiscal expansion and supporting “Abenomics.” Takaichi aims to coordinate government and central bank efforts for inflation through wage and profit increases. Technology stocks led the rally, with Advantest, Disco Corp, Tokyo Electron, SoftBank Group, and Lasertec seeing significant gains.
• Hong Kong - HSI fell 0.7% to 26,958, marking its second consecutive decline amid cautious trading before a local holiday and ongoing closures for China's Golden Week. Political risks in Europe, including the French PM's sudden resignation, weighed on sentiment. Tech and consumer sectors led the losses, with Galaxy Ent., Techtronic Inds., and Trip.com notably down. EV stocks like Li Auto, Geely Auto, and XPeng also fell. However, gold miners saw gains, including Shandong Gold Mining, Zijin Gold Intl., and Zhaojin Mining, as bullion prices reached a record high.

Earnings this week:

Asia

• 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

• 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 held heavy losses after its worst open in 35 years following Sanae Takaichi’s surprise LDP win, with USDJPY peaking at 150.48 and EURJPY hitting a record 176.25. Swaps now price about 6bp of BoJ easing this month versus ~14bp Friday
• The dollar later trimmed gains as the euro fell to a one‑week low after French PM Sebastien Lecornu’s resignation; EURUSD touched 1.1712 after 1.1652 earlier, the OAT–Bund spread hit its yearly high, and EURGBP dipped to 0.86738, lowest since Sep 18, before paring.
• Dollar‑bloc currencies outperformed (USDCAD steady at 1.3951, AUDUSD +0.2% to 0.6617), while Australian bonds opened lower, catching up with US Treasuries.

Commodities:

• Gold hit a fresh record near $4,000 as the US shutdown clouds the Fed outlook. It rose up to 0.4% to $3,976.25 in early Asian hours after Monday’s 1.9% gain. With key data halted, traders still price a quarter‑point cut this month, a tailwind for non‑yielding bullion.
• Oil steadied after a two‑day rise as OPEC+ approved a modest 137,000 barrels‑a‑day increase and Saudi kept its main Asia grade price unchanged, surprising traders. WTI remained below $62 after Monday’s 1.3% gain; Brent held above $65.

Fixed income:

• US Treasuries weakened in a bear‑steepening move set overnight by a jump in Japan’s long end after pro‑stimulus Sanae Takaichi’s surprise LDP leadership win, and compounded by European political risk. Through a muted US session with few fresh catalysts, yields cheapened 2–4.5bp across the curve, futures volumes ran well below normal, and the long end led losses, leaving 2s10s and 5s30s notably steeper. French bonds also sold off after Prime Minister Sebastien Lecornu’s unexpected resignation.

For a global look at markets – go to Inspiration.

This content is marketing content and should not be considered investment advice. Trading financial instruments carries risks and historic performance is not a guarantee for future performance.
The instrument(s) mentioned in this content may be issued by a partner, from which Saxo receives promotion, payment or retrocessions. While Saxo receives compensation from these partnerships, all content is conducted with the intention of providing clients with valuable options and information.