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Asia-Pacific Trading Sentiment

Asia-Pacific equity markets ended Friday’s session with a mixed performance as global investors turned their attention to U.S. Federal Reserve Chair Jerome Powell’s highly anticipated speech at the central bank’s annual Jackson Hole symposium. His remarks are expected to provide critical signals on whether interest rate cuts are coming as soon as September.

South Korea’s Kospi rose 0.66%, supported by gains in tech and semiconductor shares, while the smaller-cap Kosdaq added 0.41%. In contrast, Japan’s Nikkei 225 dipped 0.18%, even as the broader Topix gained 0.37%, reflecting sectoral divergence within Tokyo markets.

Inflation Update from Japan

Japan reported that its core inflation eased to 3.1% in July, down from 3.3% in June, but still above the 3.0% forecast from economists. The figure — which excludes fresh food costs — marked the lowest level in several months but highlighted lingering price pressures.

Rice prices, a key driver of earlier food inflation, also cooled, with annual inflation at 90.7% in July, compared to levels exceeding 100% in previous months. The moderation comes after a shortage earlier this year pushed supermarket prices for a five-kilogram bag of rice above 4,200 yen ($28) at the peak.

Regional Movers

Elsewhere in Asia, Australia’s S&P/ASX 200 slipped 0.3%, retreating slightly after the index hit a milestone 9,000 points for the first time on Thursday.

In China, mainland CSI 300 advanced 1.18%, led by consumer and renewable energy stocks, while Hong Kong’s Hang Seng Index added 0.32%, supported by property and tech names amid expectations of further government stimulus.

Wall Street Extends Losses

The cautious sentiment across Asia followed a weak U.S. session overnight. Wall Street’s major indices all closed lower, extending recent declines as traders positioned ahead of Powell’s speech.

• The S&P 500 fell 0.4%, marking its fifth straight day of losses, closing at 6,370.17.
• The Nasdaq Composite slipped 0.34%, finishing at 21,100.31.
• The Dow Jones Industrial Average dropped 152.81 points, or 0.34%, to end at 44,785.50.

According to the CME FedWatch Tool, futures markets now price in a 74% probability that the Fed will cut rates at its September meeting, a shift from earlier expectations that the central bank might wait until later in the year.

Market Outlook

With Powell’s address on the horizon, investors remain cautious but hopeful that the Fed could soon pivot toward a rate-cutting cycle. For Asia-Pacific markets, short-term volatility is likely to continue as traders balance domestic economic data — like Japan’s cooling but still elevated inflation — against the Fed’s policy trajectory.

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