Asia Markets Mixed as Japan and South Korea Rally on Tech Gains, China Stocks Slip on Weak PMI
Asian stock markets traded mixed on Friday, with Japan and South Korea extending their record rallies driven by strength in technology shares, while Chinese stocks slipped following weak factory data that signaled continued economic challenges.
Japan and South Korea Extend Gains
Investors digested a series of economic reports from Japan, including Tokyo’s consumer inflation and factory output data, a day after the Bank of Japan (BOJ) kept interest rates unchanged.
Overnight, Wall Street indices posted steep losses on concerns about artificial intelligence (AI) spending, but U.S. futures rebounded in Asian hours, helped by strong quarterly results from Apple (NASDAQ:AAPL) and Amazon (NASDAQ:AMZN).
Japan’s Nikkei 225 jumped 2.1% to reach a record high of 52,391.45 points, while the broader TOPIX index added 0.4%. Gains were fueled by semiconductor and AI-linked shares, mirroring strength in U.S. tech stocks. The Nikkei was on track for a 15% monthly gain in October.
In South Korea, the KOSPI index rose 0.7%, staying close to record highs set in the previous session. Chip giants Samsung Electronics (KS:005930) and SK Hynix (KS:000660) led the advance. The index was headed for a 20% surge this month, underscoring investor confidence in the country’s tech sector.
Elsewhere, Australia’s S&P/ASX 200 gained 0.3%, while Singapore’s Straits Times Index edged 0.2% lower. India’s Nifty 50 futures slipped slightly before the opening bell.
China Stocks Fall After Weak PMI Data
In contrast, Chinese markets fell after official data showed manufacturing activity contracted for a seventh consecutive month in October. The services PMI rose only marginally, reinforcing concerns about China’s fragile economic recovery and fueling speculation that Beijing may introduce new stimulus measures soon.
The CSI 300 index of blue-chip stocks fell 1%, while the Shanghai Composite lost 0.7%. Hong Kong’s Hang Seng Index declined 0.6%, as investors reacted to persistent macroeconomic headwinds.
Market sentiment was also shaped by cautious optimism following Thursday’s meeting between U.S. President Donald Trump and Chinese President Xi Jinping.
Trump called the talks “amazing,” with discussions covering trade tariffs and technology exports, but few concrete outcomes left markets uncertain about the path forward.
Japan Data Highlights Persistent Inflation
In Japan, fresh data added nuance to the Bank of Japan’s policy outlook.
Tokyo’s core consumer price index (CPI) rose 2.8% year-on-year in October, surpassing expectations and signaling ongoing inflation pressures.
Factory output in September increased 2.2% from the previous month, beating forecasts, while retail sales gained 0.5% year-on-year, suggesting fragile domestic demand.
The stronger-than-expected inflation readings could keep the BOJ under pressure to tighten policy sooner than anticipated. However, officials continue to stress that sustained wage growth remains a key condition for future rate hikes.
