Asian Markets Mixed as Japan GDP Surprises, Chinese Data Disappoints

Asian equity markets showed a mixed performance on Friday, with Japan’s stocks rallying on stronger-than-expected economic growth, while Hong Kong fell amid weak Chinese industrial and retail data. Trading volumes were thin in South Korea and India due to public holidays.

Japan’s Economic Growth Supports Nikkei
Tokyo’s Nikkei 225 surged 1%, hovering near Wednesday’s record high of 43,451, while the broader TOPIX index climbed 0.8%, rebounding from record levels reached earlier in the week.

Friday’s data revealed that Japan’s GDP expanded 1% year-on-year in Q2, surpassing the 0.4% forecast and building on a revised 0.6% growth in Q1. Strong exports and resilient capital spending helped offset pressures from U.S. tariffs, reinforcing optimism about Japan’s economic momentum. Analysts suggest the stronger-than-expected outcome could prompt the Bank of Japan to consider additional monetary tightening measures.

Weak Chinese Data Weighs on Hong Kong
In contrast, Chinese economic indicators disappointed in July. Industrial production growth slowed, reflecting waning overseas demand after early tariff-driven stockpiling, while retail sales also came in below expectations, signaling subdued domestic consumption.

As a result, Hong Kong’s Hang Seng Index fell 1.3%. In Mainland China, however, the Shanghai Composite and CSI 300 both posted gains of 0.5%, suggesting selective buying in response to attractive valuations.

Regional Highlights

• Australia’s S&P/ASX 200 advanced 0.4% to a record high.
• Singapore’s Straits Times Index declined 0.9%, dragged down by weaker regional demand.

U.S. Markets in Focus
On Wall Street, major indices closed largely unchanged on Thursday, as hot U.S. producer price data tempered expectations of an outsized Federal Reserve rate cut next month. Nevertheless, the S&P 500 reached a fresh record high, reflecting market confidence in a quarter-point Fed cut still largely priced in for September. Dow Jones futures traded slightly higher during Asian hours, indicating cautious investor sentiment.