Mixed Asian session as BOJ hawks cap Nikkei; China tech rallies

Asian equities traded mixed on Wednesday. Japan’s Nikkei 225 slid 0.8% after the Bank of Japan’s April meeting minutes showed board members debating faster rate hikes. Tech-heavy indices in China and South Korea rose, with the Hang Seng Tech index up 1.2% on US-China trade talk optimism.

Lower crude oil prices gave import-dependent economies a cushion. Brent crude held near $78 a barrel on demand concerns. The BOJ minutes, however, created a ceiling for Tokyo stocks. Several board members said the central bank should raise rates “without delay” if inflation stays above target, the minutes showed. That pushed the yen to 149.2 against the dollar, its strongest since March.

“The BOJ is signaling the next hike is closer than markets priced,” an Asian equity trader at a Tokyo-based brokerage told AlphaScala. “That caps foreign demand for the Nikkei while the yen strengthens.”

Hong Kong and Shanghai stocks rose. The Hang Seng Index added 0.6% after Chinese state media reported that Beijing and Washington would hold trade talks as soon as next week. The Shanghai Composite gained 0.3% on real-estate support measures. Kweichow Moutai, a bellwether for discretionary spending, rose 1.1% after a liquor price survey showed stable retail demand.

South Korea’s Kospi rose 0.4% as Samsung Electronics and SK Hynix tracked US semiconductor strength overnight. Australia’s S&P/ASX 200 slipped 0.2% as miners fell, partly offsetting gains in banks.

The Federal Reserve’s preferred inflation gauge, the core PCE print due Friday, set the tone for US futures. S&P 500 futures ticked up 0.1%. Treasuries held steady after a quiet session. The 10-year yield sat at 4.26%. Markets priced a 60% probability of a rate cut by September, per CME FedWatch.

“It’s the same pattern – dip buyers in China tech, sellers in Japan,” said the trader. “The macro data this week decides who’s wrong.”

Other markets: India’s Nifty 50 added 0.3%, helped by IT stocks. Singapore’s Straits Times Index was flat. The MSCI Asia ex-Japan index rose 0.5%, its fourth gain in five sessions.