The second quarter kicked off with a lukewarm start for Asian equities on Monday, with markets wavering between neutral and slight gains, ahead of Donald Trump’s summit with China’s president later this week.
Japan’s Nikkei Stock Average NIK, +0.39% was recently up 0.4%, shrugging off a stronger yen, as the index rebounded from a seven-week low on Friday. Australia’s S&P/ASX 200 XJO, +0.13% was flat, weighed down by disappointing retail sales data, while Korea’s Kospi SEU, +0.34% rose 0.3% and the Hang Seng IndexHSI, +0.50% was 0.5% higher. Mainland Chinese markets were closed.
Japan stocks shook off slack numbers from the Bank of Japan’s business confidence survey, released Monday. The main index measuring large manufacturers’ confidence rose to plus 12 in the quarter from plus 10 in the quarter before, which was less than expected.
Caution is growing over U.S. economic policies ahead of the meeting between President Donald Trump and Chinese President Xi Jinping later this week. On Friday, Trump signed executive orders aimed at curbing what he has described as unfair trade practices. Many see the orders as aimed at China ahead of Xi’s visit to the U.S.
In Japan, equities got a lift from food and other domestic demand stocks but were capped by fears that Trump’s trade focus could zero in on Japan, given that a U.S.-Japan economic dialogue expected to begin later this month. Chocolate maker Meiji2269, +3.13% was up 2.4% and Suntory Beverage & Food 2587, +1.92% was up 1.8%. Financial stocks also dragged after Treasury yields declined. Dai-ichi Life8750, -2.45% was off 1.9%, while Resona 8308, -2.04% slid 1.8%.
Meanwhile, embattled Toshiba 6502, -5.47% continued its bumpy trading, with Friday’s 5.8% rise unraveling Monday. This followed media reports over the weekend that the company could miss the April 11 deadline to release its much-delayed third-quarter results. Shares rose a combined 10% on Thursday and Friday following the bankruptcy filing for nuclear subsidiary Westinghouse. The industrial conglomerate recently down 3.8%.
Elsewhere, Australian retail sales fell in February, led by a second month of declines in clothing and footwear sales. Retail sales fell 0.1% in February from a month earlier, the Australian Bureau of Statistics said Monday. Economists expected a 0.3% rise in the month.
In currencies, the yen rose 0.2% against the dollar. Investors need to remain cautious about downside risks for the dollar at around ¥108 this quarter amid uncertainty about U.S. trade and currency policy, said Osamu Takashima, chief FX strategist at Citigroup Global Markets Japan.
Looking ahead, markets participants will be watching out for data on European Union producer prices and PMI data out of the U.S.