Mixed equity trading seen – US/Iran weekend skirmish had no material impact

Asia market update: Mixed equity trading seen; US/Iran weekend skirmish had no material impact; Japan’s end-Jul FX intervention confirmed; NPS to halt FX hedging after KRW gains; Foxconn Aug sales +52% y/y; NY markets are on holiday ahead of Thurs-Fri US inflation data.

General trend and developments

- On the Iranian front, Iran’s Top Security Official outlined plans of a restricted zone to be announced outside the Strait of Hormuz in the coming days, extending from the line of the US Navy’s blockade into the Gulf. Vessels entering the zone will face sanctions, with Iran and Oman expected to sign maps defining authorized shipping routes in the coming days. Additionally, US CENTCOM said its forces had redirected 92 commercial vessels, disabled three and boarded two as of September 6th, consistent with the Kpler data showing only 10 commodity vessels per day have been transiting the Strait of Hormuz, reflecting the 10-day average of 10 on Sunday [September 6th, 2026]. On the military front, the US said it struck 3 Iranian oil tankers on Saturday.

- OPEC+ has agreed to maintain its current oil production targets unchanged for October 2026, following the full completion of the phased rollback prior of the 1.65 million barrels per day (bpd) voluntary cuts originally implemented in 2023 (as expected). The seven participating countries (Saudi Arabia, Russia, Iraq, Kuwait, Algeria, Kazakhstan, and Oman) will hold September 2026 required production levels steady into October, while reaffirming their commitment to full conformity with the Declaration of Cooperation. They will continue monthly meetings to monitor market conditions, with the next gathering set for October 4th, 2026.

- China announces equity capital injections for domestic financial firms. Large Chinese financial institutions announced equity raises [including ICBC and insurers] in which the MOF will participate. China’s $54B recap plan to bolster financial capacity, according to the local press. Recall in early May, China announced plans to inject $43.9B into major state banks [2nd round of the targeted capital replenishment plan]. In the current round, the China MOF plans to issue CNY300B ($43.9B) in special treasury bonds to support the core tier 1 capital of financial institutions. Mainland and Hong Kong Banking Indices underperform.

- Japan’s FX reserves fell to $1.208T at end-August (vs. $1.287 trillion at end-July), a record drop of -$79.6B. The decline largely reflected the Japanese authorities’ record yen-buying intervention, totaling ~¥13.8T (= ~$88B) during the July 30th-August 26th period [in line with prior reports of joint FX intervention] Back on Jul 30th, U.S. Treasury Secretary Scott Bessent indicated that the U.S. Treasury had sold euros to purchase the Japanese yen in late-July 2026). The data suggests Japan may have sold Treasuries [Japan end-Aug Foreign Securities Holdings: $0.84T v $0.93T m/m].

- Following on from Friday’s market close, the Nikkei 225 index announced a reshuffle [effective October 1st, 2026]: J Advanced Metals (5016.JP), Capcom (9697.JP), and Kokusai Electric (6525.JP) will join the index, whilst Archion (543A.JP), Kanadevia (7004.JP), and Konica Minolta (4902.JP) will exit. Shares of the incoming stocks jumped immediately—JX Advanced Metals shares up as much as +5.4%, Capcom +5.7%, and Kokusai Electric +8.9%—whilst Konica Minolta fell as much as -6.2%. Separately, delistings from the Tokyo Stock Exchange are on track to hit a record high for the third consecutive year in 2026, driven by companies going private or failing to meet stricter listing criteria.

- Additionally, Foxconn (formerly Hon Hai Precision Industries) reported August revenues of NT$921.8B, +52.0% y/y, with strong growth in cloud and networking divisions driven by accelerating AI demand. Q3 overall performance expected to exceed expectations.

- Following on from the weekend talks with Russia President Putin, US envoys Steve Witkoff and Jared Kushner held equally “very substantial” discussions with Ukrainian President Zelenskyy in Kyiv, where both sides expressed encouragement over diplomatic progress and support for returning to a trilateral US-Russia-Ukraine format. Zelenskyy confirmed the talks covered air-defense missile supplies, a winter support package, including energy and US LNG, and a broader prosperity plan. Witkoff said he felt good about the peace efforts and stressed that the US seeks a diplomatic rather than kinetic resolution, while Kushner noted that the team is working behind the scenes to develop a “peace package” encompassing security and economic guarantees, with the aim of ending the Russia-Ukraine war before winter.

- Looking ahead this week (Asian-weighted focus, EST/EDT), key data releases include the OPEC Meeting on Sunday September 6th, CN August Trade Balance and CPI/PPI on Tuesday September 8th, JP August PPI on Thursday September 10th, and CN August Yuan Loans & Total Social Financing & M2 Money Stock on Saturday September 12th. There are no holidays in Asia this week, although US markets are closed on Monday for Labor Day, which will reduce liquidity, thin order books, and widen spreads. [US data for the looking ahead section: Thursday, September 10, 2026 08:30 AM Producer Price Index for August 2026 ; Friday, September 11, 2026 08:30 AM Consumer Price Index for August 2026].

- US equity FUTs -0.1% to +0.1% during Asia trading.

Looking ahead (Asian-weighted focus, using EST/EDT time-zone)

- Sun Sep 6th: OPEC Meeting, (Sun night, JP Aug Foreign Reserves - USD).

- Mon Sep 7th: CN/HK Foreign Reserves - USD, EU Q2 GDP & Employment, (Mon night, KR Q2 GDP, JP Q2 GDP, AU July Building Approvals, JP 5-Year JGB Auction, DE July Trade Balance, SA Q2 GDP).

- Tue Sep 8th: TW Aug CPI, CN Aug Trade Balance, (Tue night, KR Aug Unemployment Rate, JP M2 & M3 Money Stock, CN Aug CPI/PPI, ID Aug Consumer Confidence, MY July Industrial Production).

- Wed Sep 9th: TW Aug Trade Balance, US 10-Year Note Auction, (Wed night, TH Aug Consumer Confidence, ID July Retail Sales, DE Aug CPI).

- Thu Sep 10th: OPEC Monthly Report, EU ECB Interest Rate Decision, US Aug PPI, US Aug Existing Home Sales, US 30-Year Bond Auction, (Thu night, NZ Aug Business PMI, JP Q3 BSI Large Manufacturing Conditions, JP Aug PPI, MY July Unemployment Rate, UK July GDP & Industrial Production & Trade Balance).

- Fri Sep 11th: IEA Monthly Report, RU Interest Rate Decision, US Aug CPI & Core CPI, US Sep Preliminary Michigan Consumer Sentiment, WASDE Report, RU Q2 GDP & Aug CPI.

- Sat Sep 12th: CN Aug New Yuan Loans & Total Social Financing & M2 Money Stock.

Holidays in Asia this week

- No holidays in Asia this week.

- Mon Sep 7th: (Note: “Labor Day” – U.S. markets closed, reduced liquidity).

Headlines/economic data

Australia/New Zealand

-(AU) ASX 200 opens +0.1% at 9,002.

- (AU) Australia Aug ANZ-Indeed Job Advertisements M/M: 2.5% v 1.9% prior.

- (AU) Bathla [collapsed property developer] reaches short-term funding agreement with 5 lenders - Press.

China/Hong Kong

-(CN) Shanghai Composite opens +0.3% at 3,942; (HK) Hang Seng opens flat at 25,653.

-(CN) China unveils plan to strengthen rural investment.

-(CN) China news update: Large Chinese financial institutions announce equity raises, details continue to surface regarding Xi’s expected Sept trip to the US; NY markets are on holiday.

- (CN) USD/CNY China PBOC sets the yuan mid-point at 6.7795 v 6.7787 prior.

- (CN) China PBOC Open Market Operation (OMO): Sells CNY500M in 7-day Reverse Repos; Net drains CNY5B v drains CNY20B prior.

Japan

-(JP) Nikkei 225 opens +0.9% at 65,600.

-(JP) Japan end-August Foreign Reserves: $1.21T v $1.29T prior.

-(JP) Japan PM Takaichi adviser states that the BOJ likely to raise rates in Sept and continue quarterly hikes - Press [update].

-(JP) Japan July Preliminary Leading Index CI: 117.9 v 118.0e.

-(JP) Tokyo Stock Exchange hit record number of delistings for the 3rd straight year - Nikkei.

-(JP) Follow up: Following the Nikkei 225 index reshuffle: JX Advanced Metal (5016.JP) shares rise as much as +5.4%, Capcom (9697.JP) shares rise as much as +5.7%, Kokusai Electric (6525.JP) shares rise +8.9% and Konica Minolta (4902.JP) shares fall -6.2%.

-(JP) Japan Defense Minister Koizumi to retain post - Nikkei [update].

-(JP) TM Toyota aims to boost profit outside auto-sales to ¥3.00T (~+40%) by FY30 - Nikkei.

Korea

- (KR) Kospi opens +3.3% at 6,911.

- (KR) USD/KRW trades at the lowest level since Oct 7th 2024.

- (KR) South Korea chooses $22.3B Texas gas plant as first US project - Daily.

- (KR) South Korea Pension Fund (NPS) suspends FX hedging - market sources.

- (KR) South Korea sells KRW3.2T vs. KRW3.2T indicated in 3.5% 3-Year Bonds; Avg Yield: 3.875% v 3.34% prior.

- (KR) Bank of Korea sells KRW700B in 3-month Monetary Stabilization Bonds (MSB); Avg Yield: 3.040% v 3.025% prior.

- (KR) North Korea PM Kim Jong Un: New warship can carry out annihilating retaliatory strikes on the enemy at any time; New warship is proof of change in just 2-3 years - KCNA.

Other Asia

-(PH) USD/PHP Philippine Peso weakens to record low of 62.719/USD.

-(PH) Philippine Finance Chief Frederick Go: BSP intervenes when FX volatility is beyond what's comfortable.

-(PH) Philippines Defense Secretary: US gave Manila 'definite assurances' commitments remain unchanged.

-(PH) Philippines sells total PHP38.7B vs PHP42-60.0B indicated in 1-month, 3-month, 6-month and 12-month bills.

-(TH) Thailand Aug CPI M/M: 0.6% v 0.5%e; Y/Y: 2.5% v 2.4%e.

-(TH) Thailand sells THB20B vs. THB20B indicated in 6-month bills; Avg Yield: 0.92989% v 0.94454% prior; bid-to-cover: 2.33x v 2.25x prior.

-(IN) India August Passenger Vehicle Retail Sales at 402.4K, +16.1% y/y.

-(IN) USD/INR India Central Bank (RBI) said to be likely selling USD through state-run banks to limit the Rupee weakness – traders.

-(SG) Singapore July Retail Sales M/M: 0.9% v 0.9% prior; Y/Y: 1.5% v 3.1%e.

-(ID) Indonesia Aug Foreign Reserves: $146.5B v $145.3B prior.

-(TW) 2317.TW Reports Aug (NT$) Rev 921.8B, +52.0% y/y - update.

North America

-(US) Aug change in Nonfarm Payrolls: +162K V +55KE (highest since Apr) [Friday update].

-(US) Aug unemployment rate: 4.1% V 4.1%E [Friday update].

-(US) Aug average hourly earnings M/M: 0.3% V 0.3%E; Y/Y: 3.1% V 3.1%E [Friday update].

-(US) US Special Envoy Witkoff: Encouraged by substantive, important discussion; Feels good about peace talks in Moscow and Kyiv; “We seek a diplomatic resolution to this conflict, not a kinetic resolution."

-(US) BA [Confirms] Amazon-branded Boeing 767-300 airplane crashes at Miami airport; 5 killed.

-(US) TSLA Tesla China offers cash incentives on 'in-stock' Model 3 and Model Y models in the amount of CNY5.0-10.0K.

Europe

-(RU) Kremlin aide Ushakov: Talks with US envoys Kushner and Witkoff were useful, frank and substantive [weekend update].

-(DE) Germany's AfD party scored a historic victory in the eastern state of Saxony-Anhalt, seen at 44.5% (vs. 20.8% in 2021) in state election - ARD/ZDF Poll.

-(UR) Follow up: Ukraine President Zelenskiy: First round of talks between Ukraine, US negotiations is over; Hopes US peace negotiators will return to Kyiv; We need to do everything for trilateral meetings with Russia to happen, need to see what Russia says.

-(PT) Fitch raises Portugal sovereign rating one notch to A+ from A; Outlook Stable [weekend update].

-(GR) Greece PM announces tax cuts and wage increases of €2.2B for 2027 [weekend update].

-(UK) Jaguar Land Rover to cut about 4,000 jobs as sales fall amid tariff impacts - London Times [weekend update].

-(RU) Russian Defense Ministry: Russia hit vessel with military cargo in Ukraine's port of Chornomorsk - IFX.

-(UK) REC: UK hiring accelerated for the first time in 4 years; cites Aug data - financial press.

-(UK) ABF.UK EU approves Co.-Wilmar JV Acquisition of Hebei Mauri Food.

-(SE) Sweden Sept SEB Housing-Price Indicator: 41 v 44 prior.

Middle East

-(IR) Iran's Top Security Official: Restricted zone will be announced outside the Strait of Hormuz in the coming days; Zone will begin from line of US Navy's blockade and extend to areas in the Gulf - State TV/Media.

-OPEC+ agrees to maintain output targets following the completion of the phased rollback of the 1.65M bpd voluntary cuts from 2023, as expected, commencing in October, 2026.

-(IR) IRGC says it targeted three vessels on unauthorized routes through the Strait of Hormuz; Claims ballistic missiles were launched at US aircraft carrier and destroyer; No confirmation from US military [weekend update].

-(IR) US CENTCOM: As of September 6th, US forces have redirected 92 commercial vessels, disabled 3 and boarded 2 to ensure compliance in blockade against Iran - post on X.

-(IR) Kpler data: Average of 10 commodity vessels transited the Strait of Hormuz per day, up from four on Thursday [September 3rd, 2026], and the same as the 10-day average of 10 on Sunday [September 6th, 2026].

-(QA) Fitch affirms Qatar sovereign rating at 'AA'; Outlook Negative [weekend update].

-(IQ) Iraq Oil Min: Iraq has raised its export capacity to over 3M bpd [weekend update].

-(IL) Israel military says it struck southern Lebanon after Hezbollah launched drones towards Israeli soldiers in the security zone [weekend update].

Levels as of 01:20 ET

Nikkei 225 +1.9%; ASX 200 +0.1%; Hang Seng -1.2%; Shanghai Composite -0.1%; Kospi +4.1%.

Equity S&P500 Futures -0.1%; Nasdaq100 +0.1%; DAX -0.2%; FTSE100 -0.1%.

EUR 1.1620-1.1607; JPY 156.28-155.80; AUD 0.7212-0.7196; NZD 0.5884-0.5866.

Gold -0.6% at $4,404/oz; BTC -0.2% at $79,911; WTI Crude Oil +1.1% at $92.52/bbl; Copper -0.2% at $6.6563/lbs.