Asian Shares Mixed; China, HK Stocks Rally On AI Optimism

Asian shares ended mixed on Friday, with mainland Chinese and Hong Kong markets rising sharply as DeepSeek AI optimism lifted tech stocks.

Regional markets elsewhere were subdued as Amazon issued a disappointing revenue forecast for the first quarter and investors awaited U.S. President Donald Trump’s next move on trade curbs ahead of China’s tariff deadline next week.

Traders also looked ahead to the release of the monthly U.S. jobs report as well as preliminary readings on consumer sentiment and inflation expectations in February later in the day for clues regarding the Federal Reserve’s next interest rate decision.

The jobs report may show that U.S. employment climbed by 170,000 jobs in January after an increase of 256,000 jobs in December. The jobless rate is seen holding steady at 4.1 percent.

The yen hit a nine-week high against the U.S. dollar after Bank of Japan board member Tamura advocated for raising interest rates to at least 1 percent by the end of 2025 fiscal year.

Separately, the International Monetary Fund cautioned that Japan should stay vigilant against potential spillover effects stemming from increased volatility in global markets.

Gold was set for a sixth straight weekly gain, driven by uncertainty over Trump’s tariff policies, which is fueling demand for hedging from central banks and investors. Oil prices remained on track for a third consecutive weekly decline, pressured by fears of a supply glut.

China’s Shanghai Composite Index jumped 1.0 percent to 3,303.67 and Hong Kong’s Hang Seng Index shot up 1.2 percent to 21,133.54, with technology stocks rising the most.

Japanese markets fell notably as the yen extended gains into a fifth day. The Nikkei 225 Index slid 0.7 percent to 38,787.02, while the broader Topix Index settled 0.5 percent lower at 2,737.23.

U.S. President Donald Trump meets Japanese Prime Minister Shigeru Ishiba for the first time today in light of China’s rising military power and the shifting global balance of power.

Seoul stocks snapped a three-day winning streak, with battery and automotive shares underperforming. The Kospi dropped 0.6 percent to 2,521.92.

Hyundai Rotem soared 11.3 percent after a local securities firm forecast improved earnings for the defense equipment manufacturer this year.

Australian markets ended modestly lower, dragged down by gold and energy stocks. The benchmark S&P/ASX 200 Index edged down 0.1 percent to 8,511.40, while the broader All Ordinaries Index finished marginally lower at 8,780.30.

Across the Tasman, New Zealand’s benchmark S&P/NZX 50 Index closed up 0.5 percent at 12,902.19.

U.S. stocks ended mixed in choppy trading overnight as investors awaited Amazon’s earnings results and the latest jobs report.

In economic news, initial jobless claims rose more than expected last week, while worker productivity growth slowed more than expected in the fourth quarter, driving up labor costs, separate reports revealed.

The tech-heavy Nasdaq Composite rose half a percent and the S&P 500 added 0.4 percent to end higher for the third straight session as Treasury Secretary Scott Bessent reiterated his view on a lower path for 10-year yields under the Trump administration. The Dow dipped 0.3 percent.

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