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Thursday, November 06, 2025
What’s happening: Japanese shares rose sharply this morning, mirroring the rebound in the US stock market on Wednesday.
What happened: Japan’s Nikkei 225 recovered losses recorded earlier during the week, with the steepest declines in financial, technology and automobile stocks.
Investors also responded to the economic reports released by Japan this morning.
Why it matters: Wall Street stocks surged on Wednesday, driven by upbeat economic reports and rising speculations of the US Supreme Court rejecting President Donal Trump’s aggressive trade policy measures.
The developments in the US provided a boost to overall risk appetite, lending support to Japanese stocks this morning.
Data released this morning showed Japan’s real wages declined 1.4% year-over-year. This marked the ninth monthly decline in a row and raised speculations of further interest rate hikes by the Bank of Japan.
The S&P Global Japan services PMI was revised higher to 53.1 in October, from a flash reading of 52.4. Although the figure came in slightly below September’s reading of 53.3, it indicated continued growth in the services activity. New orders grew at the slowest pace in 16 months, while foreign demand fell further last month.
Japan’s composite PMI rose to 51.5 in October, from the preliminary estimate of 50.9. Then figure came in higher than September’s four-month low of 51.3, signalling an expansion in private sector activity for the second straight month.
Nintendo, Disco Corp, Lasertec and Hitachi were the top gainers in Japan’s equity market this morning. The Asian Dow and the major stock indices of China, Hong Kong and India recorded significant gains.
Japan’s Nikkei 225 jumped 1.31% to 50,870.10, after falling 2.50% in the previous session, while the TOPIX index rose 1.21% to 3,307.92.
What to watch: Data on household spending (0330 UAE Time), foreign bond investment (0350 UAE Time) and Reuters Tankan index (0400 UAE Time) will be released on Friday. Household spending in Japan rose by 2.3% year-over-year in August, accelerating from a 1.4% gain in the previous month. It is expected to surge by 2.5% in September.
Bond Investments by Japanese abroad fell by ¥351.40 billion during the week ending October 25. Analysts expect the Reuters Tankan index for Japanese manufacturers to rise to a reading of +10 in November from +8 in October.
Context: The GBP/USD forex pair rose this morning as investors digested the latest economic reports.
Details: Data released on Wednesday showed that the S&P Global UK composite PMI surged to 52.2 in October, from 50.1 in the previous month. The figure also came significantly higher than the preliminary reading of 51.1.
UK’s services PMI jumped to 52.3 in October, from the preliminary reading of 51.1. This topped September’s five-month low of 50.8. The latest reading signalled growth in services activity with a recovery in order books. Meanwhile, new car sales in the UK rose by 0.5% year-over-year to 144,948 in October.
Weakness in the US dollar lent support to the GBP/USD forex pair. The US dollar index, which measures the greenback’s performance versus a basket of major peers, fell around 0.2% to 100.03 this morning.
The GBP/USD forex pair gained around 0.1% to reach 1.3062 this morning.
What to watch: Investors await the release of economic data on S&P Global construction PMI (1330 UAE Time) today. The UK’s construction PMI, which surged to 46.2 in September from 45.5 in August, is expected to rise further to 46.7 in October.
The Bank of England will announce its interest rate decision (1600 UAE Time) today. The BoE is widely expected to keep its key rate unchanged at 4%, as policymakers balance slowing inflation with signals of a cooling economy.
While consumer price growth eased to 3.8% in September, it remained significantly above the bank’s 2% target, while wage and employment reports indicated a softening in the labour market.
Other Markets: US trading indices closed higher on Wednesday, with the Dow Jones index, S&P 500 and Nasdaq 100 up by 0.48%, 0.37% and 0.72%, respectively.
Ukraine released a video of its soldiers raising the national flag in Pokrovsk city, claiming that it had got back control of the region from Russian troops. The news sent the RUB/USD pair lower in forex trading this morning.
Vietnam’s trade surplus rose to $2.6 billion in October, from $2.03 billion in the previous month, which lent support to the VND/USD forex pair.
Australia’s goods trade surplus widened to A$3.94 billion in September, from A$1.11 billion in the previous month. The latest reading topping market estimates of A$3.85 billion sent the AUD/USD pair higher in forex trading this morning.
Brazil’s central bank kept its benchmark interest rate unchanged at 15% in November, lending support to the BRL/USD forex pair.
South Korea’s current account surplus widened to $13.47 billion in September, recording the highest in three months. However, the KRW/USD pair fell in forex trading this morning.
Spain’s industrial production (1200 UAE Time), 10-year Index-Linked Obligacion auction (1340 UAE Time), 10-year Obligacion auction (1340 UAE Time), 15-year Obligacion auction (1340 UAE Time) and 7-year Obligacion auction (1340 UAE Time), Eurozone’s HCOB construction PMI (1230 UAE Time) and retail sales (1400 UAE Time), France’s HCOB construction PMI (1230 UAE Time), 2035 OAT auction (1400 UAE Time), 2042 OAT auction (1400 UAE Time) and 2049 OAT auction (1400 UAE Time), Germany’s HCOB construction PMI (1230 UAE Time), Italy’s HCOB construction PMI (1230 UAE Time), UK’s DMP 1Y CPI expectations (1330 UAE Time) and DMP 3M output price expectations (1330 UAE Time), Turkey’s foreign exchange reserves (1530 UAE Time), US Challenger job cuts (1630 UAE Time), EIA natural gas stocks change (1930 UAE Time), 4-week Bill auction (2030 UAE Time), 8-week Bill auction (2030 UAE Time), 15-year mortgage rate (2100 UAE Time) and 30-year mortgage rate (2100 UAE Time), Canada’s Ivey PMI (1900 UAE Time) and 10-year Bond auction (2100 UAE Time), Brazil’s balance of trade (2200 UAE Time), as well as Mexico’s interest rate decision (2300 UAE Time).
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