Asian markets presented a mixed performance on Friday. Japanese stocks showed strong gains due to a weaker yen, whereas the Seoul market faced declines amidst persistent political unrest.
Chinese markets, both mainland and Hong Kong, concluded with slight changes. This followed the release of official data, indicating that China's industrial profits fell for the fourth month in a row by November. The Shanghai Composite Index rose slightly to 3,400.14 after a volatile trading session, while the Hang Seng Index in Hong Kong closed near unchanged at 20,090.46.
The World Bank has upgraded its growth projections for China's economy in 2024 and 2025. However, it cautions that feeble household and business confidence, along with obstacles in the property sector, may impede growth in the foreseeable future. Investors await further insights regarding Beijing's fiscal stimulus strategies, with hints of a shift towards a more proactive fiscal approach and moderate monetary easing anticipated next year.
Japanese markets observed a rally, fueled by the perspective that the Bank of Japan may postpone interest rate hikes to counterbalance President Trump’s tariff threats, despite a robust Tokyo inflation report. New data revealed a decline in Japan's industrial output in November—the first in three months. Consequently, the Nikkei Average climbed 1.80% to 40,281.16, while the broader Topix Index increased by 1.26% to 2,801.68. The yen continued to hover near a five-month low after the Bank of Japan's governor refrained from indicating imminent interest rate changes.
In the corporate arena, Toyota Motor gained 1.5% following its ambitious target to double its return on equity to 20% by 2030. Honda Motor saw an increase of 2.1%, while Nissan Motor took a hit, falling 7.8%. SoftBank Group, Sony, and Fast Retailing all advanced by 2-3%.
South Korean stocks fell amid a political maelstrom, with the acting president facing potential impeachment after President Yoon Suk Yeol's brief enforcement of martial law was scrutinized by the Constitutional Court. The Kospi Index dropped by 1.02% to 2,404.77, marking its third consecutive loss. This occurred as the won-dollar exchange rate soared past 1,480 won—its highest in over 15 years—prompting worries of potential capital flight.
In Australia, markets posted gains as trading resumed post-holiday break. The S&P/ASX 200 rose by 0.5% to 8,261.80, and the broader All Ordinaries increased by 0.57% to 8,520.10, with most sectors advancing except utilities and technology. Meanwhile, in New Zealand, the S&P/NZX-50 Index climbed by 1% to 13,205.10.
In the U.S., stock markets also displayed mixed outcomes as trading recommenced after the Christmas break. Retail sales exceeded expectations despite a compressed holiday season, while initial jobless claims surprisingly declined for the week ending December 21, though continuing claims escalated to a three-year peak. The Dow finished flat but leaned slightly positive, whereas the Nasdaq Composite and the S&P 500 ended marginally lower.
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