Asian stock markets largely moved into positive territory on Tuesday, breaking away from the negative sentiment that dragged Wall Street down the previous day. While U.S. indices stumbled due to rising global bond yields, Asian investors found reasons to buy. The most significant movement came from Tokyo’s Nikkei 225, which gained 0.5% to close at 49,534.36. This rise was primarily driven by financial stocks, which rallied after the Bank of Japan’s governor signaled a potential interest rate hike later this month.
Other regional markets also saw healthy gains. South Korea’s Kospi outperformed its peers, jumping 1.5% to 3,977.85. This surge was fueled by heavy buying in the technology sector, specifically targeting heavyweights like Samsung Electronics and SK Hynix. In Hong Kong, the Hang Seng index rose 0.7%, and Taiwan’s benchmark climbed 1%. However, not every market joined the rally; Shanghai dipped slightly by 0.3%, and India’s Sensex saw a marginal decline.
The optimistic mood in Asia contrasted sharply with the U.S. session, where the S&P 500 snapped a five-day winning streak, falling 0.5%. The Dow Jones and Nasdaq also posted losses. The American retreat was largely blamed on rising Treasury yields, which tend to pressure stock valuations. Investors are currently weighing the likelihood of the Federal Reserve cutting rates next week to support a softening job market against the inflationary pressures signaled by the bond market.
Compounding the mixed global sentiment, U.S. manufacturers reported ongoing struggles. A recent survey indicated that companies are prioritizing headcount management over new hiring, with supply chain uncertainties and tariffs complicating operations. One manufacturer noted that current conditions feel even more difficult than during the pandemic due to the unpredictability of supply chains.
Meanwhile, currency and commodity markets remained relatively stable. U.S. crude oil hovered around $59.34 per barrel, while the dollar strengthened slightly against the yen. As global investors await the next moves from both the Federal Reserve and the Bank of Japan, volatility is expected to persist across both equity and bond markets.