Asian Stocks Rise as Tech Shares Rally on Nvidia Boost, Japan Outperforms on Soft Inflation

Most Asian stocks advanced on Thursday, led by technology shares tracking an overnight surge in Nvidia, while Japanese markets outperformed following a softer-than-expected producer inflation report, which eased concerns over potential interest rate hikes by the Bank of Japan (BOJ).

Tech Shares Lead Gains After Nvidia AI Optimism

Regional technology stocks rallied, mirroring their U.S. counterparts, as Nvidia’s CEO, Jensen Huang, expressed optimism about strong demand for artificial intelligence (AI) technologies. This particularly benefited chipmakers, with South Korea’s KOSPI gaining 1.2%, and Taiwan’s TSMC (TW:2330) surging 4.7%, significantly boosting the Taiwan Weighted Index. Nvidia suppliers, including SK Hynix Inc. (KS:000660) and Advantest Corp. (TYO:6857), rose 5.4% and 7%, respectively.

Elsewhere, Samsung Electronics Co Ltd (KS:005930) gained 1% after reports of planned global job cuts of up to 30% in certain divisions.

Japan’s Stocks Soar as Inflation Cools

Japan’s Nikkei 225 and TOPIX indices surged 2% to 3%, making them the top performers in Asia. The rise came after the producer price index (PPI) inflation for August came in below expectations, weakening the hawkish narrative from the BOJ regarding future rate hikes. This softer inflation data lessened the immediate need for further tightening, especially given recent statements from BOJ board member Naoki Tamura, who suggested rates should rise to 1% to curb inflation risks.

Subdued Gains in Other Sectors

Beyond technology, gains in Asian markets were more modest. Australia’s ASX 200 rose 0.7%, while futures for India’s Nifty 50 indicated a tepid start after Wednesday’s losses. In contrast, China’s Shanghai Shenzhen CSI 300, Shanghai Composite, and Hong Kong’s Hang Seng indices struggled to find momentum, trading in a narrow range amid concerns over potential new U.S. trade restrictions against China.

Outlook Uncertain as Investors Await Fed Decision

While Asian markets saw positive movement, U.S. stock index futures remained flat in Asian trade as a stronger-than-expected consumer inflation report tempered expectations of significant interest rate cuts. Investors are closely watching for the Federal Reserve’s next move, with markets currently pricing in a 25 basis point cut at its upcoming meeting.