Investing.com-- Most Asian stocks rose on Thursday, with Japanese markets drifting higher before a Bank of Japan meeting, while Chinese shares rebounded as the government outlined more support for equities.
Regional technology stocks were hit with some profit-taking after a strong rally on Wednesday, which was fueled largely by U.S. President Donald Trump and OpenAI flagging a $500 billion investment in artificial intelligence.
The announcement, coupled with some strong earnings, boosted Wall Street in overnight trade, which saw the S&P 500 briefly hit record highs.
But U.S. stocks now appeared to be cooling from the rally, with Wall Street futures falling in Asian trade.
Japanese stocks upbeat as BOJ rate hike looms
Japan’s Nikkei 225 and TOPIX indexes rose 0.5% and 0.4%, respectively, adding to strong gains from the prior session.
Focus was squarely on the BOJ, which is widely expected to raise interest rates by 25 basis points at the conclusion of a meeting on Friday. Recent signs of resilience in the Japanese economy- amid steady inflation and strong private spending- saw markets largely price in the possibility of a Jan rate hike.
While a rate hike does bode poorly for Japanese markets, BofA analysts argued that a Jan rate hike was already priced into markets, and that the BOJ was unlikely to raise interest rates until at least mid-2025 after this week’s hike.
Before the BOJ decision, Japanese inflation and purchasing managers index data is also due on Friday.
Chinese shares rebound as Beijing outlines more support
China’s Shanghai Shenzhen CSI 300 and Shanghai Composite indexes surged 1.2% and 0.7%, respectively, on Thursday, rebounding from losses in the prior session.
Hong Kong's Hang Seng index added 0.3%.
Chinese stocks sank on Wednesday after Trump threatened to impose a 10% tariff on Chinese imports from February 1. While the 10% figure is far lower than the 60% duties threatened by Trump earlier, it still presents headwinds for Chinese exporters.
But sentiment towards Chinese markets was boosted by Beijing stating that it will guide big state insurers and commercial insurance funds to increase investments in local stocks.
The move heralds more government money moving into stock markets, and comes as Beijing’s latest line of support for the struggling equity market.
Beyond support for stocks, China is also expected to dole out more stimulus measures this year to offset the impact of U.S. trade tariffs.
South Korea’s KOSPI dips on weak GDP, SK Hynix
South Korea’s KOSPI was the worst performer in Asia on Thursday, sinking 0.9% as heavyweight technology stocks were hit by a wave of profit-taking.
This was especially apparent with SK Hynix Inc (KS:000660), with the memory chip maker falling more than 3% even as it clocked a record fourth-quarter profit on robust artificial intelligence demand. The company clocked a bigger profit than that signaled by rival Samsung Electronics (KS:005930).
Sentiment towards South Korea was also rattled by weaker-than-expected gross domestic product data for the fourth quarter, as the country grappled with increased political upheaval after impeached President Yun Suk Yeol attempted to unsuccessfully impose martial law.
But weakening growth heralds more interest rate cuts by the Bank of Korea.
Broader Asian markets were a mixed bag, amid some profit-taking after a strong rally on Wednesday. Australia’s ASX 200 fell 0.6% from a 1-½ month high.
Singapore’s Straits Times index rose 0.6%, while futures for India’s Nifty 50 index pointed to a flat open after the index rose marginally from a seven-month low.