Asian stocks fell this week as a fatal bird flu outbreak in China outweighed a surge in Japanese shares sparked by unprecedented stimulus from the Bank of Japan’s (BOJ) new leadership.
Air China Ltd (中國國際航空), Asia’s biggest carrier by market value, plunged 12 percent, amid concern a strain of bird flu that has killed six people in China may become an epidemic. Toyota Motor Corp, the world’s largest carmaker, jumped 4.7 percent as the yen fell against all its major peers.
The MSCI Asia Pacific Index fell 1.5 percent to 133.49 this week, erasing last week’s gain. Shares jumped in Japan after the BOJ said it would double the monetary base by the end of next year in its biggest round of quantitative easing.
“We are pretty much in a panic mode from a possible epidemic from the new bird flu in China.” said Jackson Wong, vice president at Hong Kong-based brokerage Tanrich Securities Co. “When you look at the Japanese stimulus program, it will only help Japan for the time being, especially short term.”
The MSCI Asia Pacific Index has added about 3.6 percent this year, less than half the gains on the Standard & Poor’s 500 Index, amid concern China will move to cool its property market. Asia’s benchmark trades at 13.4 times average estimated earnings, compared with multiples of 14 for the S&P 500 and 12.3 for the STOXX Europe 600 Index, according to data compiled by Bloomberg.
Japan’s Nikkei 225 Stock Average, the best-performing major equity gauge this year, finished the week at its highest level since Sept. 1, 2008, adding 3.5 percent. The measure has rallied 48 percent since mid-November amid bets policymakers would make good on new BOJ Governor Haruhiko Kuroda’s pledge to do “whatever it takes” to beat deflation.
Taiwan’s TAIEX rose 0.3 percent in a shortened trading week, its second consecutive weekly advance. The index closed on Wednesday at 7,942.35.
Every other major market in Asia fell. Australia’s S&P/ASX 200 slid 1.5 percent, its fourth straight weekly decline. Singapore’s Straits Times Index slid 0.3 percent.
South Korea’s KOSPI declined 3.9 percent, as North Korea moved a missile to its eastern coast, possibly for training and test-firing, and warned it was poised to conduct a “smaller, lighter and diversified nuclear strike.”
Hong Kong’s Hang Seng Index dropped 2.6 percent to its lowest level since November, as China on Friday reported six deaths from a new strain of bird flu. The Shanghai Composite Index, which was closed for holiday on Thursday and Friday, fell 0.5 percent on the week.
In other markets on Friday:
Wellington ended flat from Thursday, adding 2.81 points to 4,432.97.
Manila closed 0.83 percent lower from Thursday, shedding 56.58 percent to 6,727.14.
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WEAKER ACTIVITY: The sharpest deterioration was seen in the electronics and optical components sector, with the production index falling 13.2 points to 44.5 Taiwan’s manufacturing sector last month contracted for a second consecutive month, with the purchasing managers’ index (PMI) slipping to 48, reflecting ongoing caution over trade uncertainties, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. The decline reflects growing caution among companies amid uncertainty surrounding US tariffs, semiconductor duties and automotive import levies, and it is also likely linked to fading front-loading activity, CIER president Lien Hsien-ming (連賢明) said. “Some clients have started shifting orders to Southeast Asian countries where tariff regimes are already clear,” Lien told a news conference. Firms across the supply chain are also lowering stock levels to mitigate
NEGOTIATIONS: Semiconductors play an outsized role in Taiwan’s industrial and economic development and are a major driver of the Taiwan-US trade imbalance With US President Donald Trump threatening to impose tariffs on semiconductors, Taiwan is expected to face a significant challenge, as information and communications technology (ICT) products account for more than 70 percent of its exports to the US, Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) president Lien Hsien-ming (連賢明) said on Friday. Compared with other countries, semiconductors play a disproportionately large role in Taiwan’s industrial and economic development, Lien said. As the sixth-largest contributor to the US trade deficit, Taiwan recorded a US$73.9 billion trade surplus with the US last year — up from US$47.8 billion in 2023 — driven by strong
RESHAPING COMMERCE: Major industrialized economies accepted 15 percent duties on their products, while charges on items from Mexico, Canada and China are even bigger US President Donald Trump has unveiled a slew of new tariffs that boosted the average US rate on goods from across the world, forging ahead with his turbulent effort to reshape international commerce. The baseline rates for many trading partners remain unchanged at 10 percent from the duties Trump imposed in April, easing the worst fears of investors after the president had previously said they could double. Yet his move to raise tariffs on some Canadian goods to 35 percent threatens to inject fresh tensions into an already strained relationship, while nations such as Switzerland and New Zealand also saw increased
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