FX.co ★ Asian Shares Mixed; China, HK Stocks Rally On AI Optimism

Asian markets presented a mixed picture on Friday. Notably, shares in mainland China and Hong Kong experienced significant gains, buoyed by enthusiasm surrounding DeepSeek AI, which positively impacted tech stocks.

Conversely, other regional markets showed restrained movement following Amazon's lackluster revenue forecast for the first quarter. Additionally, investors were cautiously awaiting U.S. President Donald Trump’s impending decisions regarding trade restrictions, especially with China's tariff deadline looming next week.

Market participants were also focused on the forthcoming U.S. monthly jobs report and preliminary insights into consumer sentiment and inflation expectations for February. These indicators are crucial in predicting the Federal Reserve's upcoming interest rate decisions for this year.

Anticipations for the jobs report are that U.S. employment increased by 170,000 in January, down from December's 256,000 boost, with the unemployment rate expected to remain at 4.1 percent.

In currency dynamics, the yen reached a nine-week peak against the U.S. dollar. This rise followed Bank of Japan board member Tamura's suggestion that interest rates should be increased to a minimum of 1 percent by the end of the 2025 fiscal year.

In a separate statement, the International Monetary Fund advised caution for Japan regarding potential ripple effects due to heightened volatility in global markets.

Gold maintained its upward trajectory for the sixth consecutive week, largely supported by ongoing uncertainties surrounding Trump's tariff strategy, which is prompting central banks and investors to seek safe havens.

Crude oil prices are on course for their third straight weekly decline, as concerns about an oversupply weigh on the market.

China's Shanghai Composite Index rose by 1.01 percent to 3,303.67, while Hong Kong’s Hang Seng Index advanced by 1.16 percent to 21,133.54, driven predominantly by the technology sector.

In Japan, markets fell, reflecting the yen's continued strength over five days. The Nikkei average decreased by 0.72 percent to 38,787.02, with the broader Topix index dropping 0.54 percent to settle at 2,737.23.

Meanwhile, U.S. President Donald Trump is scheduled to have an inaugural meeting with Japanese Prime Minister Shigeru Ishiba today, amid growing concerns about China's expanding military influence and the evolving global power landscape.

Seoul’s stock market ended a three-day positive run as battery and automotive stocks underperformed. The Kospi average fell by 0.58 percent to 2,521.92. Notably, Hyundai Rotem surged by 11.3 percent following a favorable earnings forecast for the defense equipment manufacturer by a local securities firm.

In Australia, declines in gold and energy stocks led to a downturn in the market. The primary S&P/ASX 200 slipped by 0.11 percent to 8,511.40, while the All Ordinaries index ended slightly lower at 8,780.30. Conversely, New Zealand saw the S&P/NZX 50 index increase by 0.45 percent, closing at 12,902.19.

U.S. stocks mirrored the mixed performance in Asian markets, reflecting the turbulent trading atmosphere as investors awaited key outcomes from Amazon's earnings and the labor market report.

Highlighting economic developments, new jobless claims experienced a higher rise than anticipated, and productivity growth among workers decelerated more than expected in Q4, consequently driving labor costs up, according to separate reports.

The tech-centric Nasdaq Composite climbed 0.5 percent, and the S&P 500 edged up by 0.4 percent, marking its third successive session of gains. This movement was stimulated by Treasury Secretary Scott Bessent's reaffirmation of a forecast for reduced 10-year yields under Trump's governance. The Dow Jones, however, recorded a slight decline of 0.3 percent.