Asian Equities Slip 0.2% After Best Quarter in 17 Years; Kospi Drops 2.3% on Pension Rebalancing

According to Bloomberg, Asian equities edged lower as investors turned cautious after a rally in chipmakers and tech stocks helped propel them to their best quarter in 17 years. MSCI's regional equities gauge dropped 0.2%, snapping a two-day gain, with nine of 11 subgroups declining. Stocks in Japan and Taiwan rose, while South Korea's benchmark dropped 2.3%, with the Kospi falling as much as 3.9% as investor focus shifted to the resumption of the National Pension Service's domestic stock rebalancing after a temporary suspension through end-June. Hong Kong markets were closed for a public holiday. The quarter saw global equities deliver their best performance in almost six years, with Japan's Nikkei 225 gaining more than 37% — its best three-month performance on record — and South Korea's Kospi jumping almost 70%, the best advance since 1998. Brent crude rose 0.4% to $73.20 a barrel, reversing Tuesday's losses, even as the US said it had positive talks in Doha on a deal with Iran. The dollar strengthened for a second day while gold slipped 0.6%. The yen weakened 0.1% to 162.77 per dollar after falling to a 40-year low, with strategists increasingly pointing to 163 and beyond, arguing the Finance Ministry may tolerate a weaker yen than in 2024. Tuesday's US economic data showed job openings little changed in May and consumer confidence edging higher in June as lower gasoline prices offset job-market concerns. Steady employment and elevated inflation have raised wagers the Fed may need to raise rates later this year; officials next meet at the end of July after unanimously leaving rates unchanged at chairman Warsh's first meeting last month. JPMorgan Asset Management's Bob Michele said he sees the Fed raising rates "once or twice" next year but not engaging in a "dramatic hiking cycle." In corporate news, Nike shares fell about 1.5% in extended trading on a cautious outlook, Coles Group is in talks to buy Greencross Pet Wellness for up to A$4 billion ($2.8 billion), and the US government removed foreign access restrictions on Anthropic's Fable 5 AI model.