Japan’s Nikkei 225 and TOPIX indexes declined nearly 0.9% each, Australia’s ASX 200 gained 0.3%, while South Korea’s KOSPI declined 0.3%
Most Asian stocks rose on Friday as attention turned to the Fed’s first potential interest rate cut in more than four years, with Hong Kong markets leading gains on bargain buying into local technology heavyweights.
Japanese stocks lagged their regional peers after seeing wild swings this week amid weak inflation signals and hawkish comments from the Bank of Japan. A BoJ meeting next week is also in focus.
Markets tracked some overnight gains on Wall Street, where investors looked past sticky inflation numbers amid persistent bets on an interest rate cut by the Federal Reserve when it meets next week. Steady buying in the technology sector also helped.
Hong Kong’s Hang Seng index was the best performer in Asia on Friday, extending a rebound into a third session as traders bought into heavily discounted local internet stocks.
But Chinese markets were much less positive, with the Shanghai Shenzhen CSI 300 and Shanghai Composite indexes rising slightly from more than seven-month lows touched earlier this week.
Sentiment towards China remained strained following a slew of average economic readings from the country for August. The prospect of more U.S. trade restrictions also weighed.
Japan’s Nikkei 225 and TOPIX indexes declined nearly 0.9% each on Friday, lagging their regional peers.
Both indexes were set for a muted end to the week after logging wild swings, as investors weighed some soft signals on inflation and hawkish comments from BoJ officials.
BoJ officials warned that the central bank will likely hike interest rates in tandem with stronger inflation. But soft PPI inflation somewhat undermined this messaging.
The BoJ is set to meet next week, although investors are uncertain over another rate hike from the central bank. Japanese consumer inflation data is also on tap next week.
Wider Asian markets were mixed amid speculation over whether the Federal Reserve will reduce rates by 25 or 50 basis points next week. While some strong inflation numbers furthered the case for a smaller rate cut, signs of weakness in the labour market saw bets on a 50 basis points cut come back into play.
Traders were pricing in a 56% probability for a 25 basis points cut, and a 44% probability for a 50 basis points cut, according to CME Fedwatch.
Australia’s ASX 200 gained 0.3%, while South Korea’s KOSPI declined 0.3%.
