Japan September exports rise 16.7% y/y, slower than forecast

Asian stocks, excluding Japan, climbed 1.5% on the first day of trading following a Wall Street increase as early data from the earnings season revealed strong profits for global companies, boosting investor confidence. Korean shares surged 4%, while Japan's Nikkei 225 climbed 1.3%. The S&P 500 e-mini futures rose 0.3%. Since a sharp sell-off last week, regional stocks have steadied but have fluctuated within a narrow range.

On Wall Street, stocks exhibited mild positivity, lifting the S&P 500 by 0.3% as oil prices and Treasury yields eased. Of the companies that reported earnings, 86% exceeded estimates, according to LSEG. While US markets benefitted from strong earnings, other regions faced ongoing concerns over artificial intelligence trade and elevated oil and borrowing costs.

Oil prices dipped following unconfirmed reports of renewed peace negotiations, only to recover after the reports were debunked. French stocks declined as there remained concerns about the government's plan to increase police presence to curb upcoming protests. French 10-year OAT yielded increased by 2.7 basis points to 4.94%, widening the yield differential with the German 10-year bund to 153.1 basis points.

Brent crude rose 1.1% to $110.03 a barrel, extending gains after touching a five-month high during a volatile session on Tuesday. Meanwhile, traders considered a meeting between Iran's president and Pakistan's army chief, a crucial US-Iran mediator, alongside ongoing Houthi attacks on Saudi infrastructure and reports of vessel attacks in the Gulf.

US envoy Steve Witkoff was scheduled to meet with Russian President Vladimir Putin later in the day after constructive talks with Ukrainian President Volodymyr Zelenskiy in Norway. US President Donald Trump suggested it was time for Ukraine to end the war. The yen weakened 0.1% against the US dollar to 158.33 yen following Japan's export data, which showed a 16.7% increase for September, surpassing estimates.

However, the data missed market expectations. A Reuters poll indicated that most economists believe the Bank of Japan will not raise interest rates at its meeting on October 30, instead opting for a 25-basis point increase in December, followed by quarterly hikes. Similarly, economists polled expect the Federal Reserve to skip a rate hike at its meeting on October 28 before raising rates in December, with Fed funds futures indicating an 83% probability of a hold later in October, unchanged from the previous day.

The yield on the US 10-year Treasury bond rose 1 basis point to 5.123%. In emerging markets, traders awaited a decision from Indonesia's central bank, grappling to stabilize the rupiah after a market plunge following an MSCI warning of potential exclusion from major benchmarks. Bitcoin climbed 0.3% to $82,988.76, while Ether increased 0.2% to $2,452.59.