On Thursday, most Asian stocks saw gains, especially in the technology sector, following a strong overnight performance by Nvidia. Japanese markets, in particular, performed well due to lower-than-expected producer inflation data, which contradicted recent hawkish remarks from the Bank of Japan (BOJ). Technology shares across the region benefited from a boost in chipmakers, while the CEO of Nvidia highlighted growing demand for artificial intelligence. This rally came despite U.S. stock futures remaining flat during Asian trade, due to a stronger-than-anticipated consumer inflation report which tempered hopes for imminent interest rate cuts.
In Japan, the Nikkei 225 and TOPIX indexes led the region, climbing by 2% to 3%. The softer producer price inflation for August weakened the case for further interest rate hikes by the BOJ. Although BOJ officials have recently suggested rates may need to increase, the latest inflation data suggests less urgency for such action. BOJ board member Naoki Tamura remarked that rates should rise to at least 1% to mitigate inflation risks, but with inflation appearing subdued, the central bank has less pressure to act immediately.
Technology stocks across Asia recorded significant gains, with the sector benefiting from Nvidia’s strong performance, particularly after its CEO’s comments reinforced confidence in the sustained demand for AI technologies. South Korea’s KOSPI increased by 1.2%, while Taiwan’s TSMC surged 4.7%, boosting the broader Taiwan Weighted index. Nvidia’s suppliers, including SK Hynix and Advantest Corp., rallied by 5.4% and 7%, respectively. Samsung Electronics also rose by 1% following reports that the company was planning global job cuts of up to 30% in certain divisions.
Outside of the technology sector, market gains were more modest. Australia’s ASX 200 advanced by 0.7%, while Indian stock futures indicated a subdued start following a drop on Wednesday. Chinese markets, including the Shanghai Shenzhen CSI 300, Shanghai Composite, and Hong Kong’s Hang Seng, saw limited movement, with concerns about potential new trade restrictions from the U.S. weighing on sentiment.
The rally in Asian markets was largely driven by technology, specifically chipmakers, following Nvidia’s surge. Japanese stocks stood out with significant gains, spurred by a softer inflation reading that eased pressure on the BOJ to raise interest rates. However, broader market sentiment remained cautious, especially in China, due to ongoing concerns about U.S.-China trade tensions.
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