Blue Ribbon day for Asian stocks fades somewhat near end

Asia market update: Takaichi wins JP PM, names fresh Fin Min; Blue Ribbon day for Asian stocks fades somewhat near end.

General trend and developments

- Takaichi won the Japan Prime Minister election in the first round of Lower House parliamentary voting, managing to scoop 237 seats, 4 more than required.

- Prior to the confirmation vote, Takaichi appointed relative newbie Satsuki Katayama to the key role of Finance Minister. While Katayama has only won 3 elections to the House of Representatives, she chairs the ruling LDP Research Commission on the Finance and Banking systems, with a strong background in economic and finance fields. Served as minister in charge of Local Economic Revitalisation under former PM Shinzo Abe. Likely to help Takaichi work through budget details needed for policy goals.

- Back in March this year, Katayama said in a financial press interview that she saw the Yen's real value at “120-130”. Yen initially edged higher back towards 150 after Katayama’s nomination but later lost ground -0.4% to the USD back below 151.

- FWIW, Takaichi will be Japan’s first female PM, and Katayama its first female Finance Minister.

- Other more familiar faces include Motegi as Trade Negotiator while former Trade negotiator Ryosei Akazawa to be METI minister and Koizumi to be Defense Min.

- South Korea’s Kospi +1% continued its roaring rally, now up 62% in 2025, as Samsung and Hynix continue on to record highs of their own.

- Nikkei 225 +1.5% early continued to bore down on the 50K level (later pared gains) while Australia’s ASX hit another record high as well, even while lagging in Asia, +0.7%.

- Hang Seng +1.5% with Shanghai Composite +1.2%.

- Australia PM Albanese at last got his long-awaited personal meeting with Pres Trump at the White House. Likely “Albo” will be happy, winning a critical minerals framework for Australia while the US DOD will invest in a Gallium refinery. Australia funds will raise US investment to $1.44T by 2035. Major miners BHP +2%, Rio Tinto +2%, Fortescue +1% Mineral Resources +4%, Alcoa +8%, Arafura Rare Earth +6%; AU Resources Index +1.9%.

- South Korea exports Oct 1-20 fell nearly -8% y/y, with the decline attributed to the unusually long Chuseok holidays this year, coupled with a sharp drop in exports to the US (-24.7%) due to high tariff impositions with exports to China -9.2% y/y. While chips saw another healthy increase, +20%, autos unusually saw a -25% fall, as ship exports continued to increase +11% as South Korea takes back market share from Chinese shipbuilders.

- China’s offshore Yuan hit levels not seen since September amid the strongest fix since mid-Oct 2024.

- US equity FUTs flat during Asia trading.

Looking ahead (Asian-weighted releases, using Asian time zone)

- Wed Oct 22nd ID rate decision.

- Thu Oct 23rd Korea rate decision.

- Fri Oct 24th JP Sept CPI, Global Flash PMIs, US Sept PMI (delayed release).

Holidays in Asia this week

- Mon Oct 20th Singapore.

- Tue Oct 21st India.

- Wed Oct 22nd India.

- Thu Oct 23rd Thailand.

Headlines/economic data

Australia/New Zealand

- ASX 200 opens +0.5% at 9,075.

- Australia sells A$300M v A$300M indicated in 4.75% Jun 2054 Bonds; Avg Yield: 4.8213% v 5.0141% prior; bid-to-cover: 4.05x v 3.35x prior.

- Australia Treasurer Chalmers: Australia can become a world leader in rare earths - financial press interview.

- White House releases sheet on critical minerals framework with Australia; DOD will invest in Gallium refinery; US additionally secures more access to US beef in Australia; Australia funds will raise US investment to $1.44T by 2035 [overnight update].

- New Zealand Sept Trade Balance (NZD): -1.4B v -1.24B prior.

China/Hong Kong

- Hang Seng opens +1.2% at 26,160; Shanghai Composite opens +0.2% at 3,870.

- Chinese press sees chance of future cuts in the Loan Prime Rates (LPRs); cites China Securities Journal and Shanghai Securities News.

- US Pres Trump: Potential 155% tariffs on China will come on Nov 1st, unless we make a deal; Expects to work out a fair deal with Xi; We'll end up with a strong trade deal with China following meeting in South Korea; Will come to China in early 2026 once the details are sorted out [overnight update].

- China PBOC sets Yuan reference rate: 7.0930 v 7.0973 prior (strongest level since Oct 15th, 2024).

- China PBOC Open Market Operation (OMO): Injects CNY159.5B in 7-day reverse repos; Net injects CNY68.5B v drains CNY65B prior.

Japan

- Nikkei 225 opens +1.0% 49,675.

- Japan Sept Tokyo Condominiums for Sale Y/Y: 4.3% v 78.7% prior.

- Japan parliament formally elects Takaichi as Prime Minister.

- Japan PM-elect Takaichi said to appoint Satsuki Katayama as Finance Minister - Japanese press.

- Japan's Motegi said to take on additional role as Trade Negotiator – Sankei.

- Japan PM-elect said to appoint Kimi Onoda as Economic Security Minister - Japanese press.

- Japan PM-elect Takaichi appoints Ryosei Akazawa as METI minister - Japanese press.

- Japan outgoing Fin Min Kato: Need careful steering of policy as yields rise – press.

- Japan Outgoing Economy Min Muto: China rare earth control a concern for supply chain.

- Japan sells ¥299.8B v ¥300B indicated in 10-Year Climate Transition Bonds; Yield at lowest accepted price: 1.6800% v 0.943% prior, bid-to-cover 3.56x v 3.31x prior.

- Japan LDP's Takaichi (PM candidate): Political stability needed for economic measures- (TR) Reportedly Turkish central bankers told foreign investors last week inflation concerns were rising, suggesting rate cuts could slow down – press [overnight update].

Korea

- Kospi opens +1.0% 3,851.

- Sec of War Hegseth said to visit South Korea in Nov, may visit border area - Korea press.

- South Korea considering lowering top rate of dividend tax from 35% to 25% - South Korea press.

- South Korea Pres Office: Denies report of trade MoU with US [overnight update].

Other Asia

- Thailand Central Bank (BOT) Gov Vitai: Monetary and Fiscal policy will work in step.

North America

- US Army Sec Driscoll said to have met with PE firms on $150B army infrastructure "overhaul" - FT.

- USTR Greer: Attempts at intimidation will not stop the US from responding appropriately to China's targeting of critical industrial sectors for dominance.

- US FHFA Pulte: Trump Administration is opportunistically evaluating an offering for Freddie and Fannie, which could come as early as the end of 2025.

- (US) Transportation Sec Duffy: SpaceX is behind schedule - Fox News.

- (AR) Argentina Central Bank statement: Signs $20B swap line agreement with US Treasury Dept.

- (CA) Canada Q3 BoC Overall Business Outlook Survey: -2.3 v -2.4 prior; Notes softness in economic growth due to macroeconomic conditions.

- (CA) Canada Fin Min Champagne: Tariff remission on Chinese steel is very small.

- (CO) Colombia Pres Petro: Preparing response to US govt (in response to US Pres Trump assailing on Colombia's efforts on drug mitigation).

Europe

- (RU) Russia Spy Chief: World faces most fragile security moment since WWII; Restraint, cool heads needed to avoid war - Russian state media.

- (TR) Reportedly Turkish central bankers told foreign investors last week inflation concerns were rising, suggesting rate cuts could slow down - press.

- (EU) ECB’s Schnabel (Germany): Euro's global position is strong and should be strengthened.

- (CA) Canada Q3 BoC Overall Business Outlook Survey: -2.3 v -2.4 prior; Notes softness in economic growth due to macroeconomic conditions.

Levels as of 01:20 ET

- Nikkei 225 +0.7%, ASX 200 +0.7%, Hang Seng +1.5%; Shanghai Composite +1.2%; Kospi +0.2%.

- Equity S&P500 Futures flat; Nasdaq100 flat; DAX +0.1%; FTSE100 flat.

- EUR 1.1632-1.1656; JPY 150.47-151.44; AUD 0.6498-0.6525; NZD 0.5725-0.5753.

- Gold -0.3% at $4,347/oz; BTC -2.8% at $108,100; Crude Oil flat at $57.02/bbl; Copper -0.3% at $5.0358/lb.