Asian Shares Mostly Lower; Japanese Auto Maker Shares Tumble on North American Trade Deal

The major Asia Pacific stock indexes finished mostly lower on Friday on mixed economic news, while U.S. futures indexes touched new all-time highs in the pre-market session on the back of a new U.S. trade deal. Positive trade news further boosted sentiment, as a new North American trade deal was passed by the U.S. House of Representatives on Thursday.

On Friday, mainland Chinese stocks were little changed in the afternoon with the Shanghai and Shenzhen declining. Hong Kong’s Hang Seng Index was flat. Japan’s Nikkei 225 and Topix Index were weaker. Australia’s S&P/ASX 200 finished lower, but South Korea’s KOSPI bucked the trend with a slightly higher finish.

China Keeps Lending Benchmark Lending Rate Steady

China stood pat on its lending benchmark rate on Friday, as widely expected, after the central bank kept borrowing costs of medium-term loans steady earlier this month.

The one-year loan prime rate (LPR) was unchanged at 4.15% from the previous monthly fixing. The five-year (LPR) also remained the same at 4.80%.

Economic growth slowed to near 30-year lows in the third quarter and speculation is mounting that Beijing needs to roll out stimulus more quickly and more aggressively.

Japan’s Consumer Inflation Ticks Up

Japan’s annual core consumer inflation ticked up in November and a key price gauge hit a more than three-year high, suggesting that firms are gradually passing on rising labor and tax hike costs to shoppers.

The core consumer price index (CPI), which excludes volatile fresh food prices, rose 0.5% in November from a year earlier, government data showed on Friday, matching a median market forecast and accelerating from a 0.4% gain in October.

Japanese Auto Maker Shares Tumble in Response to New North American Trade Deal

While the positive trade news boosted U.S. investor sentiment, Japanese auto company shares took a tumble in response. The new deal included a requirement that 75% of auto parts come from North America, up from the previous 62.5% required by NAFTA.

While those rules are aimed at substantial increases in domestic production, they’re likely to hit automakers in Japan. Many Japanese automakers have production bases in Mexico.

Toyota tumbled 1.11%, Nissan lost 1.13%, while Mazda declined 0.83%, and Suzuki pared some losses to tumble 0.84%. Mitsubishi was down 1.04%.