Asian stocks moved broadly higher on Friday, led by a rebound in South Korea as technology shares recovered. However, renewed pressure from global bond markets and elevated oil prices kept most regional indexes on track for weekly losses.
US Treasury yields resumed their climb after Wednesday’s bond-buyback announcement provided only temporary relief. The 10-year yield returned to around 4.7%, while the 30-year yield approached 5.3%.
Wall Street also closed lower overnight as rising bond yields, higher oil prices and concerns over US government debt weighed on investor sentiment.
US Treasury Yields Remain a Key Market Risk
Treasury Secretary Scott Bessent said bond buybacks could eventually exceed the planned $4 billion per operation. He also pointed to a wider fiscal-consolidation strategy.
However, investors remain skeptical that these measures will be enough to address deeper fiscal concerns.
The US budget deficit remains above 6% of GDP, while annual interest expenses are estimated at roughly $1.2 trillion. These pressures continue to influence global bond markets and investor risk appetite.
Asian Markets Show Signs of Stabilization
Asian trading was more resilient than the overnight session on Wall Street.
Nasdaq 100 futures gained around 0.6%, while S&P 500 futures edged 0.2% higher, suggesting some stabilization following the previous selloff.
The MSCI AC Asia Pacific Index rose approximately 0.7%, although it remained on course for a weaker weekly performance.
KOSPI Rebounds as Korean Chip Stocks Recover
South Korea’s KOSPI climbed nearly 1% on Friday, recovering from earlier losses. Despite the rebound, the index remained around 1% lower for the week.
Technology and semiconductor shares helped drive the recovery.
SK Hynix gained about 3% on Friday and was roughly 7% higher for the week. Samsung Electronics was also up around 2% on a weekly basis.
Both companies have been major drivers of KOSPI volatility in recent sessions.
SK Hynix recently announced a 40 trillion won share buyback and cancellation program, while Samsung was reported to be preparing a shareholder-return package potentially worth around 110 trillion won.
Japan Stocks Remain Under Pressure
Japan’s Nikkei 225 fell around 0.8% on Friday and remained approximately 4.4% lower for the week, making it one of Asia’s weakest major indexes.
Investors continued to assess rising Japanese inflation and its potential impact on Bank of Japan monetary policy.
Japan’s core consumer price inflation increased 1.8% year-on-year in July, strengthening expectations that the BOJ could raise interest rates as early as September.
Higher interest rates could put additional pressure on Japanese equities, particularly if borrowing costs continue to rise.
Hong Kong Stocks Buck the Regional Trend
Hong Kong performed better than many other Asian markets.
The Hang Seng Index was up around 3% for the week, putting it on course to end a two-week losing streak.
However, individual stocks remained volatile.
Alibaba shares fell around 3% after the company reported a decline of more than 75% in quarterly profit. Capital spending jumped 75% to nearly $10 billion as the company accelerated investment in artificial intelligence infrastructure.
Meanwhile, Henderson Land shares gained more than 7% following stronger-than-expected first-half results.
Higher Oil Prices Add to Inflation Concerns
Oil prices remained another important risk for Asian markets.
Brent crude recently touched a one-month high of $94.71 per barrel before easing toward $93.12. Despite the pullback, Brent remained more than 5% higher for the week.
The latest US pressure on Iran, including warnings of tougher sanctions, has reduced expectations for a quick reopening of the Strait of Hormuz.
Persistently high oil prices could add to inflation pressures, particularly for Asian economies that rely heavily on energy imports.
Indonesia Stocks Advance After Rate Decision
Bank Indonesia kept its seven-day reverse-repurchase rate unchanged at 5.75%, in line with market expectations.
The decision was the first under acting Governor Destry Damayanti.
Indonesia’s Jakarta Composite Index gained around 0.5% on Friday and was on track for a weekly advance of more than 2%.
India, Australia and China Show Mixed Performance
India’s Nifty 50 opened modestly higher but remained approximately 0.4% lower for the week.
Australia’s S&P/ASX 200 declined around 0.4%.
Chinese stocks were relatively steady. The CSI 300 gained around 0.5%, while the Shanghai Composite traded close to unchanged.
The mixed performance highlights continued uncertainty across Asian markets as investors balance improving technology sentiment against higher bond yields and energy costs.
Nvidia and Jackson Hole Come Into Focus
Investors are now turning their attention to upcoming Nvidia earnings and next week’s Jackson Hole symposium.
Nvidia’s results could provide another major test for global technology stocks, particularly semiconductor and artificial intelligence-related companies.
At the same time, comments from Federal Reserve policymakers at Jackson Hole could offer fresh clues about the outlook for US interest rates.
For now, Asian stocks are showing signs of recovery, but elevated oil prices, rising bond yields and fiscal concerns remain major risks for markets heading into the next trading week.
