Asia stocks rise on tech gains, Japan lags on BOJ rate hike fears
Most Asian stocks advanced on Wednesday, following overnight strength on Wall Street as technology shares provided support.
However, Japanese markets underperformed after a Bank of Japan (BOJ) survey showed improving confidence among major manufacturers—fueling expectations that the central bank could raise interest rates soon.
Trading volumes across the region were subdued due to holidays in China and Hong Kong for National Day. Mainland Chinese markets will stay closed until next week.
In India, stocks recovered slightly after the Reserve Bank of India (RBI) held interest rates steady and forecast stronger economic growth for the year.
Broader sentiment remained cautious after the U.S. government entered a partial shutdown, which weighed on Wall Street futures in Asian trade. S&P 500 Futures fell nearly 0.5% by late Wednesday.
Tech stocks track Wall Street rally
Technology-heavy Asian indexes led the day’s gains. South Korea’s KOSPI rose 0.8% as tech stocks mirrored the rebound seen in U.S. peers. Optimism around artificial intelligence and bargain buying supported the sector after sharp losses through September.
Still, upside momentum was limited by uncertainty over U.S. interest rate policy. Dallas Fed President Lorie Logan reiterated caution about cutting rates too quickly, echoing other Federal Reserve officials. A prolonged U.S. government shutdown could further complicate the outlook and delay key labor market data.
Japan stocks decline on rate hike concerns
Japan’s Nikkei 225 and TOPIX were the weakest performers in Asia, falling 0.7% and 1.5%. The BOJ’s “tankan” survey showed stronger confidence among major exporters, suggesting the economy may withstand trade headwinds. This raised expectations that the BOJ could hike rates at its late-October meeting.
A stronger yen, boosted by rate hike speculation, weighed heavily on Japan’s export stocks.
Regional markets mixed
Singapore’s Straits Times index rose 0.6% on tech gains, while Australia’s ASX 200 slipped 0.3%. BHP Group fell 2% after reports that China ordered local firms to pause new dollar-based iron ore purchases from the miner.
India’s Nifty 50 index gained 0.2% after the RBI kept its policy rate unchanged. RBI Governor Sanjay Malhotra raised India’s GDP growth forecast for 2026 to 6.8% from 6.5% and lowered the inflation outlook, citing relief from recent GST reforms.
