Speaker 1: Bloomberg Audio Studios, podcasts, radio News, The.
Speaker 2: Stock Movers Report, your roundup of companies making moves in
Speaker 2: the stock market harnessing the power of Bloomberg Data.
Speaker 1: Let's take a look at some stocks on the move
Speaker 1: today in ASA. I'm Stephen Carrol with Caroline Hepker and
Speaker 1: we're joined by our markets reporter Anthony Stevens for more.
Speaker 1: And so let's start in China than we're drive by
Speaker 1: Nvitiant optical components being used in data centers is helping
Speaker 1: to lift some companies in that sector.
Speaker 3: Yeah, it's interesting. The China's index is very heavy on
Speaker 3: one small subsection of the air trade, which is the
Speaker 3: optical transceiver. These are basically components that allow servers to
Speaker 3: communicate using lightwaves to reduce obviously the speed of data transmission.
Speaker 3: That's been a very hot sector and it had been
Speaker 3: lifting the China est past the hstick and to be honest,
Speaker 3: to keep up with the COSPY on the way up.
Speaker 3: But just like the costpit had gotten crushed recently. Now
Speaker 3: this new kind of validation of the optical sector by Nvidia,
Speaker 3: you know, focusing investors' minds on the kind of growth
Speaker 3: opportunity in that space. It's interesting that one of the
Speaker 3: big names in optical, Zongji in a light, had one
Speaker 3: of Hong Kong's largest IPOs in seven years. So it's
Speaker 3: been very lucky timing for Hong Kong investors on that IPOs,
Speaker 3: it's posted three days of strong gains. Also, it's a
Speaker 3: competitive e opto link in Shanghai is also trading quite well.
Speaker 4: Interesting turning data into light okay. In terms of japan
Speaker 4: banks continuing to struggle after the intervention into the year.
Speaker 3: Now, why it's been interesting to see the Japanese earning
Speaker 3: season on banks go really well at a headline level
Speaker 3: and be rewarded with pretty shocking price performance. And the
Speaker 3: reason for that is the go forward picture looks a
Speaker 3: lot more complex for the banks on the macro than
Speaker 3: it had been during the rest of the year. So
Speaker 3: now we have this question of whether the BOJ is
Speaker 3: going to continue to hike crate alongside a currency intervention.
Speaker 3: So it was skeptical. People were skeptical about the BOJ
Speaker 3: going in the first place. Now do they go alongside
Speaker 3: a tightening that comes from a stronger FX is an
Speaker 3: open question, and you're seeing that pressure on banks, most
Speaker 3: notably from MUFG and SMFG after their earnings, they've traded
Speaker 3: quite badly. And this has been in the context of
Speaker 3: a Japanese market that is struggling for direction.
Speaker 1: Here we'll staying in Japan. Some AI bottlenecks are helping
Speaker 1: to lift some names there.
Speaker 3: Yeah, we're seeing that trade recover a little bit, helped
Speaker 3: buy the kind of overall recovery from the Nvidia guidance
Speaker 3: at some of these niche events that they're holding in
Speaker 3: the AI space. So just like the Chinese index, you're
Speaker 3: seeing a lot of the aipicks and shovels trades pick
Speaker 3: up back in Japan after very sharp downturn. Names like
Speaker 3: Ibiden for example, or Renaissance, these names have finally recovered.
Speaker 3: And Fujikura, which happens to be in the same space
Speaker 3: as the Chinese optical names, is up seven nine percent.
Speaker 3: And we also have Kians, which is on the passive
Speaker 3: components side, up to zeo point four percent.
Speaker 4: Okay, there's also obviously a massive story in the market
Speaker 4: is because of the combined US Japanese intervention in the
Speaker 4: end market and the kind of comments from Scott Besst
Speaker 4: on social media which are really interesting. All of this
Speaker 4: are made a Japanese tenure government bond auction that saw
Speaker 4: the weakest demands. It's May twenty twenty five. What does
Speaker 4: all of this mean for the Bank of Japan and
Speaker 4: for central bank tightening?
Speaker 3: Yeah, for now. On the FX side, the US and
Speaker 3: Japanese unusually well aligned. The US wants to help out
Speaker 3: so that the Japanese don't end up selling some treasuries
Speaker 3: to fund their intervention on their own. And you can
Speaker 3: see how kind of tentative the thirty year US treasuries
Speaker 3: are at the moment anyway, So that's quite well done
Speaker 3: by the US. On the Japanese side, they do need
Speaker 3: a little bit more legitimacy to help them strengthen the
Speaker 3: end because they have not that many bullets left in
Speaker 3: intervention until they come off with free floating currency mechanism.
Speaker 3: So you know, both sides coming together when it matters.
Speaker 3: But on the BOG front, a very interesting question to answer,
Speaker 3: which is is the economy running hot enough to justify
Speaker 3: an intervention and a rate hike? And there's a lot
Speaker 3: of debate around that because Japan's economy has just picked
Speaker 3: itself off off the flow and the currency is weakness
Speaker 3: has been a big part of Japan's booming exports, So
Speaker 3: you've seen that in the stock market. Exporters are really
Speaker 3: struggling unless they AI related, and there's a lot of
Speaker 3: doubt whether Japan can continue to grow without a weekend
Speaker 3: and how much the BOG really wants to go with that,
Speaker 3: the m life strategists and now internal b economists have
Speaker 3: been very strident, basically saying that without hikes there is
Speaker 3: no legitimacy to the intervention effort.
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