(Sharecast News) - Asia-Pacific markets traded mixed on Friday, diverging from Wall Street as investors weighed fresh economic data from Japan.
Core consumer prices in Tokyo rose at a slower pace in August, easing from July's 2.9% increase but remaining above the Bank of Japan's 2% target.
The figure was in line with economists' forecasts. Japan's unemployment rate also edged lower in July compared with the previous month.
Equity markets mixed as investors parse Japan data
In Tokyo, the Nikkei 225 fell 0.26% to 42,717.50, with Kawasaki Heavy Industries down 3.01%, Hino Motors off 2.82% and Isetan Mitsukoshi slipping 2.76%.
The broader Topix index declined 0.47% to 3,075.18.
Chinese equities advanced, with the Shanghai Composite up 0.37% at 3,857.93 and the Shenzhen Component gaining 0.99% to 12,696.15.
Zhejiang HangKe Technology surged 20%, Beijing Piesat Information Technology climbed 17.94% and Chengtun Mining Group rose 10.04%.
"Chinese stocks continued to climb as investors looked forward to earnings reports from major banks and corporations, including Alibaba and BYD, which will influence the sustainability of this surge," said TickMill market strategy partner Patrick Munnelly.
"Goldman Sachs analysts raised their 12-month projection for the CSI 300 Index from 4,500 to 4,900 on Thursday."
He added that the index was "on track for its highest close since March 2022, coinciding with a busy reporting day in China where 441 domestically listed companies announced their results."
In Hong Kong, the Hang Seng Index added 0.32% to 25,077.62.
BYD Electronic International gained 7.3%, while WuXi Biologics and CSPC Pharmaceutical Group rose 6.96% and 6.67% respectively.
"China's stock market is poised for a record monthly turnover, underscoring the intensity of a bull market that is increasingly drawing in new investors," Munnelly noted.
"There is a strong sense of market optimism in China, even as banks and regulatory bodies suggest they may seek to temper the exuberance, with US tariffs and a lingering real estate crisis weighing on the economy."
South Korea's Kospi 100 slipped 0.39% to 3,220.60, dragged by losses in LF Co, down 5.31%, Samsung SDI, down 4.17%, and EcoPro Materials, down 3.44%.
Australia's S&P/ASX 200 dipped 0.08% to 8,973.10, with Mesoblast falling 9.92%, PEXA Group down 9.34% and Lynas Rare Earths off 5.84%.
In New Zealand, the S&P/NZX 50 rose 0.21% to 12,930.73, with KMD Brands up 4.35%, Serko climbing 3.75% and Summerset Group advancing 3.19%.
In currencies, the dollar was little changed against the yen at JPY 146.99, as it slipped 0.01% against the Australian dollar to AUD 1.5307, and lost 0.11% against the New Zealand dollar to NZD 1.6976.
"Asian markets presented a mixed picture ahead of the Fed's key price index report expected on Friday," Munnelly said.
"Oil prices dropped 0.7% following gains in the prior session amidst diminishing hopes for a peace agreement between Russia and Ukraine."
Oil prices indeed moved lower, with Brent crude futures last down 0.82% on ICE at $68.06 per barrel, and the NYMEX quote for West Texas Intermediate off 0.77% at $64.10.
Data dump paints mixed picture of Japanese economy
On the data front, Japan released a series of key economic indicators on Friday, painting a mixed picture of the country's recovery.
Inflation in Tokyo cooled in August as expected, but underlying price pressures remained elevated, keeping the prospect of further Bank of Japan rate hikes in focus.
Core consumer prices, which exclude fresh food, rose 2.5% year-on-year, down from 2.9% in July, while a measure excluding both fresh food and energy eased slightly to 3.0% from 3.1%.
Headline CPI slowed to 2.6% from 2.9%.
Food price inflation remained high at 7.4%, driven by rising rice and grain costs, underlining persistent inflationary pressures above the BoJ's 2% target.
The central bank, which began tightening policy in early 2024, was expected to raise rates again this year, though policymakers remain cautious amid trade frictions with the US.
Japan's labour market showed improvement, with the seasonally adjusted unemployment rate falling 0.2 percentage points to 2.3% in July, the lowest since December 2019.
The number of jobless people dropped 4.7% to 1.64 million as more individuals secured new employment, though total employment slipped slightly to 68.31 million.
The job openings-to-applicants ratio was steady at 1.22, indicating stable labour demand despite more elderly workers seeking jobs to offset rising living costs.
Consumer sentiment also improved, with the Cabinet Office's consumer confidence index rising 1.2 points to 34.9 in August.
All sub-indexes strengthened, including employment, which climbed 1.7 points to 39.3, and willingness to buy durable goods, which edged up to 28.0.
Expectations of higher prices remained widespread, with 93.4% of respondents forecasting inflation over the next year.
Industrial activity was weaker, with factory output down 1.6% in July from the prior month, a larger contraction than the 1.0% decline forecast.
Manufacturers surveyed expect output to rebound 2.8% in August before easing 0.3% in September.
Retail sales underwhelmed, rising just 0.3% year-on-year, short of expectations for a 1.8% increase.
Housing construction remained subdued, though the pace of contraction slowed.
Housing starts fell 9.7% in July, following a 15.6% decline in June, marking a fourth consecutive monthly drop.
Declines moderated across categories, with built-for-sale housing contracting only 1.7% compared with 17.9% in June, while rented and owned housing also saw smaller falls.
Prefabricated and two-by-four housing starts likewise posted narrower declines.
Reporting by Josh White for Sharecast.com.
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