Nikkei drops 0.73% after Japan’s wage growth slows; Asia stocks mixed

Asia-Pacific markets exhibited mixed performance on Thursday following a sell-off in the previous session. Japan’s Nikkei 225 and South Korea’s Kospi were among the notable decliners, while other indices showed varied results.

The Nikkei 225 fell by 0.73%, reflecting investor concerns following Japan’s latest wage data. In contrast, the broader Topix index saw a slight gain.

According to recent statistics, Japan’s average monthly cash earnings increased by 3.6% year-on-year in July. This rise was lower than the 4.5% growth recorded in June.

Real wages also saw a modest increase of 0.4% year-on-year, marking a second consecutive month of growth after a 1.1% rise in June. The wage data has implications for Japan’s monetary policy.

Bank of Japan board member Hajime Takata suggested that the central bank might need to continue raising interest rates if businesses maintain their current pace of spending and wage increases.

This potential for tighter monetary policy could put additional pressure on Japanese equities.

South Korea’s Kospi declines

In South Korea, the Kospi index experienced a slight decline, while the Kosdaq fell by 1%. Despite the overall downturn, shares of South Korean chipmaker SK Hynix rose by 3.36%.

The company is preparing to start mass production of HBM3E 12-layer chips by the end of September, as reported by the company’s president and head of AI Infra division.

Chinese property sector optimism

In mainland China, the CSI 300 index posted a marginal gain, while the Hang Seng index in Hong Kong slipped by 0.33%.

Shares of certain Chinese property developers edged higher, driven by optimism about potential interest rate reductions to support the struggling property sector.

Hong Kong-listed China Vanke and Logan Group saw their shares rise by 1.5% and 1.32%, respectively.

China’s financial regulators are reportedly considering a two-phase interest rate cut to alleviate borrowing costs for homeowners and ease pressures on the banking sector.

The proposed reduction could amount to up to $5.3 trillion on outstanding mortgages, according to Bloomberg sources.

Australia’s S&P/ASX 200 rises 0.18%

Australia’s S&P/ASX 200 increased by 0.18% amid a mixed economic backdrop. Australian exports rose by 0.7% month-on-month in July, while imports declined by 0.8%.

The Australian telecom sector also saw positive developments, as Optus received approval from the Competition and Consumer Commission for its regional network and spectrum sharing agreement with rival TPG Telecom.

This agreement, announced in April, followed Optus’s opposition to a similar merger involving Telstra.

US markets continue downward trend

In the United States, market indices continued their downward trajectory for a second consecutive session.

The S&P 500 and the Nasdaq Composite both declined, with the S&P 500 losing 0.16% and the Nasdaq slipping 0.3%. However, the Dow Jones Industrial Average was an exception, edging up by 0.09%.

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