Most Asian equity markets declined on Friday, weighed down by losses in technology stocks after a weak overnight session on Wall Street dampened risk appetite. Investors also assessed fresh inflation data from Tokyo, which kept expectations of further Bank of Japan policy tightening firmly in focus.
Several regional markets that have posted strong gains so far in January retreated from record or multi-year highs as investors locked in profits. Chinese equities led the pullback across the region.
Overnight in the U.S., Wall Street finished lower, with both the S&P 500 and Nasdaq under pressure. Shares of Microsoft fell about 10% after the company’s earnings raised concerns that heavy spending on artificial intelligence may not translate into near-term returns, while cloud growth disappointed expectations. U.S. stock index futures also edged lower during Asian trading hours.
China and Hong Kong lead regional losses; Korea outperforms
In Asia, Chinese stocks posted the steepest declines. The Shanghai Shenzhen CSI 300 and the Shanghai Composite index both slid more than 1%.
Hong Kong’s Hang Seng index dropped nearly 2%, with the Hang Seng TECH sub-index posting similar losses. Despite Friday’s decline, Hong Kong shares were still on track for gains of more than 7% for January.
Singapore’s Straits Times Index slipped 0.2% after touching a record high earlier in the session and was set to finish the month up around 6%. Australia’s S&P/ASX 200 fell 0.6%, though it remained on course for a 2% monthly gain. Futures for India’s Nifty 50 edged 0.3% lower.
South Korean markets bucked the broader regional trend. The KOSPI rose 0.5%, driven by strong performances from heavyweight chipmakers SK Hynix and Samsung Electronics, which extended gains after posting strong earnings a day earlier. The KOSPI was set for a standout monthly rise of nearly 25%.
Tokyo inflation eases, BOJ tightening expectations remain
In Japan, the Nikkei 225 slipped 0.4%, while the broader TOPIX index fell 0.3%. Despite the day’s losses, the Nikkei was still on track to post gains of more than 5% for January, with some upside capped by a firmer yen.
Data released Friday showed that consumer price inflation in Tokyo cooled to its lowest level in almost four years, signaling easing price pressures in the Japanese capital. However, the core inflation measure — which excludes fresh food and is closely monitored by the Bank of Japan — also eased from the previous month but remained slightly above the BOJ’s 2% target.
The figures suggested that while inflation is moderating, underlying price pressures have not fully dissipated, keeping expectations of near-term BOJ policy tightening alive.
