Asian stocks rose on Thursday, with technology shares tracking an overnight rally in market darling Nvidia, while Japanese markets soared as a soft reading on producer inflation undermined hawkish signals from the Bank of Japan. Regional technology stocks rallied after their U.S. peers, as NVIDIA Corporation CEO Jensen Huang talked up strong artificial intelligence demand. Gains were directed largely towards chipmakers.
However, U.S. stock index futures were flat in Asian trade, as stronger-than-expected interest rate indications provided a more sobering outlook on potential interest rate cuts. Markets were seen positioning for a 25 basis point rate cut by the next week. Japanese indexes were the best performers in Asia on Thursday, rising between 2% and 3%.
Gains in Japanese stocks came as inflation data read softer than expected for August. The reading somewhat undermined recent comments from Bank of Japan officials that interest rates will need to rise further. Any further rate hikes by the BOJ are largely contingent on inflation moving higher.
Softer inflation gives the central bank less immediate impetus to raise rates.
Asian markets rally on tech gains
BOJ board member Naoki Tamura said on Thursday that the bank needed to raise interest rates to at least 1% to avoid inflationary risks.
A rally in tech stocks also supported Japanese markets, while tech-heavy bourses in Asia logged relatively stronger gains. South Korea’s KOSPI rose 1.2%, while a 4.7% rally in Taiwan’s TSMC boosted the index. Chipmakers saw significant gains, tracking an over 8% overnight rally in Nvidia, after comments from its CEO furthered the notion that AI demand will help support tech valuations even as broader economic conditions deteriorate.
Nvidia suppliers including SK Hynix Inc and Advantest Corp. rallied 5.4% and 7%, respectively. Samsung Electronics Co Ltd rose 1% after a Reuters report said the firm was planning global job cuts of up to 30% of roles in some divisions.
Beyond tech, gains in Asian markets were much more subdued. Australia’s S&P/ASX 200 added 0.7%, while futures for India’s Nifty 50 index pointed to a middling open after the index retreated on Wednesday. Chinese indexes lagged, as did Hong Kong’s Hang Seng Index, with all three moving in a flat-to-low range.
Sentiment towards China was battered by reports of U.S. lawmakers preparing more trade restrictions on the country.
