(Sharecast News) - Asia-Pacific equity markets mostly advanced on Friday, with Japanese shares hitting record highs after stronger-than-expected GDP data, while Chinese stocks gained on a wave of upbeat economic releases.
Patrick Munnelly, market strategy partner at TickMill, noted that "Japanese stocks gained 1% after the country's economy showed stronger growth than anticipated last quarter," adding that risk appetite in recent days had been lifted by expectations of US monetary easing.
Markets mixed as investors digest Japan, China data
In Tokyo, the Nikkei 225 rose 1.73% to 43,387.00, closing at an all-time high.
Ebara led gains, up 11.2%, followed by Mitsui Mining and Smelting, up 10.08%, and Japan Exchange Group, which climbed 8.94%.
The broader Topix index gained 1.63% to 3,107.68.
Chinese mainland markets also strengthened - the Shanghai Composite added 0.83% to 3,696.77, supported by sharp rises in Chongqing Zaisheng Technology, Epoxy Base Electronic Material, and Nuode Investment, all up just over 10%.
The Shenzhen Component advanced 1.6% to 11,634.67.
Munnelly pointed out that "stocks dropped by 1.2% in Hong Kong following data indicating a slowdown in China's economy in July, with disappointing factory activity and retail sales, implying that Donald Trump's trade war is starting to impact the world's second largest economy."
Hong Kong lagged, with the Hang Seng Index down 0.98% at 25,270.07, pressured by weakness in property developers.
Sun Hung Kai Properties fell 5.35%, Henderson Land lost 4.63%, and Wharf Real Estate Investment declined 4.56%.
Australian shares gained, with the S&P/ASX 200 up 0.73% to 8,938.60, driven by Ampol, up 7.68%, IDP Education, up 5.79%, and Lynas Rare Earths, up 5.23%.
In New Zealand, the S&P/NZX 50 rose 0.43% to 12,889.38, led by Pacific Edge, up 6.54%, KMD Brands, up 4.17%, and Westpac Banking Corporation, up 2.53%.
South Korean markets were closed for the National Liberation Day holiday.
In currency markets, the yen strengthened, with the dollar last down 0.66% to trade at JPY 146.79.
Munnelly observed that "the dollar weakened, while the yen strengthened against most Group-of-10 currencies," with gold prices climbing and an index tracking Asian stocks also rising.
The greenback slipped 0.24% against the Aussie to AUD 1.5361, and weakened 0.2% on the Kiwi to change hands at NZD 1.6867.
Brent crude futures fell 0.76% on ICE to $66.33 per barrel, while the NYMEX quote for West Texas Intermediate eased 0.86% to $63.41.
"Oil prices remained stable as investors prepared for the upcoming summit between the US and Russian presidents in Alaska on Friday," Munnelly added.
Japan grows faster than expected, China data disappoints
On the data front, Japan's economy grew faster than expected in the second quarter, though trade tensions with the United States continued to weigh on the outlook.
GDP expanded 0.3% from the previous quarter, up from a revised 0.1% in the first three months of the year and ahead of the 0.1% growth forecast in a Reuters poll.
On an annual basis, output rose 1.2%, down from 1.8% in the first quarter.
The reading came as Japan faced uncertainty over US trade policy, only reaching an agreement on 23 July that imposes a 15% blanket tariff on all exports to the US, including automobiles.
In China, a set of key July indicators undershot expectations, pointing to a slowdown in economic momentum.
Industrial production rose 5.7% from a year earlier, the weakest pace since November 2024 and below forecasts for a 5.9% increase.
The slowdown from June's 6.8% growth was attributed to widespread flooding and a record heatwave.
Retail sales growth also cooled, rising 3.7% year-on-year, down from 4.8% in June and missing market expectations of 4.6%.
Fixed asset investment increased 1.6% in the January-July period, slowing sharply from 2.8% in the first half and falling short of the 2.7% forecast.
Munnelly linked the broader market mood to US economic data, saying: "The unexpected rise in the US producer price index, indicating that companies are passing on high import costs affected by tariffs, curtailed the rally in Treasuries and caught investors off guard."
"Such evidence complicates the case for a rate cut in September, particularly for moderate FOMC voters, despite market expectations leaning heavily toward this outcome."
Reporting by Josh White for Sharecast.com.
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