Mixed signs in Asia with Nikkei rallying 2.6%

Indices in the Asia/Pacific were mostly mixed, except for Japan’s Nikkei, with investors welcoming the anti-inflation measures announced by Prime Minister Kishida.

Notably, returning to trading after yesterday’s national holiday holiday, the Nikkei rallied 2.6% to close at 28,546, while Japan’s broader Topix index also jumped 2% to 1,973.

Investors appeared to welcome Prime Minister Fumio Kishida’s statement that he will ask his government to find ways to deal with rising fuel and food prices in the country.

Of course, it is noted that inflation in Japan is not as high as in other countries, but it fluctuates above the central bank’s 2% target.

Elsewhere on the regional charts, indices in mainland China showed slightly lower trends, with the Shanghai Composite around unchanged at 3,281 points and the Shenzen Composite down -0.25% at 12,438 points. Conversely, in Hong Kong the Hang Seng strengthened by 0.45% to 20,171 points.

The Kospi in Korea showed small gains of 0.15% to 2,527 points, while in Australia the ASX 200 moved with losses of 0.55% to 7,032 points.

“If you look at the valuations, Asian stocks are actually not expensive,” notes Eddy Loh Maybank Group Wealth Management.

However, as he adds, “I do think there are risks to growth, particularly China, and that, I think, will keep the ceiling on overall market performance.”

Elsewhere, China’s largest microchip maker Semiconductor Manufacturing reported net profit of $514 million in the second quarter of 2022, down 25% from a year earlier, although its revenue rose 42% to $1.9 billion, with its title to decline by 2.5%.

In contrast, Samsung Electronics saw its stock rise slightly by 0.5% after South Korean President Yoon Suk-yeol formally pardoned the company’s vice chairman Jay Lee, saying he needed their help to overcome ” national economic crisis”.