Japan's Nikkei Surges on Chip Stock Rally; Softer US Inflation Boosts Asian Markets

Asian markets broadly advanced on Thursday, propelled by a rally in semiconductor stocks after a strong forecast from Micron Technology and buoyed by U.S. inflation data that came in softer than anticipated. Japan's Nikkei 225 was a standout performer, surging on the positive sentiment in the technology sector.

Chip Sector Rally Lifts Japan and South Korea

Japan's Nikkei 225 index jumped 2.5%, significantly outpacing the broader TOPIX index. The rally was concentrated in chip-related companies following an upbeat revenue forecast from U.S. memory-chip maker Micron Technology, which cited sustained demand from the artificial intelligence industry.

Key Japanese semiconductor firms saw substantial gains:

• Advantest Corp (TYO:6857) surged nearly 8%.
• Tokyo Electron (TYO:8035) climbed approximately 5%.
• Kioxia Holdings (TYO:285A) gained 4.2%.

The positive sentiment extended to other regional tech hubs. South Korea's KOSPI index rose 0.9%, with Samsung Electronics and SK Hynix gaining over 1%. The move was supported by data showing South Korean exports leaped 83.5% from a year earlier, driven by record semiconductor shipments. Taiwan's Weighted index also edged higher, with chip giant TSMC rising 1%.

U.S. Inflation Data Eases Rate Hike Fears

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Broader market sentiment was supported by new data from the United States showing inflation pressures may be easing. The Personal Consumption Expenditures (PCE) price index, the Federal Reserve's preferred inflation gauge, rose 0.3% in August, slightly below economists' expectations of a 0.4% increase.

On an annual basis, PCE inflation stood at 2.6%. The data suggests reduced pressure on the Fed to implement another interest rate hike at its upcoming October meeting. However, gains across the region were tempered by elevated bond yields and oil prices, with Brent crude remaining near $100 a barrel. Chinese mainland and Hong Kong markets were closed for public holidays.

Australia Bucks Trend on Weak Trade Figures

In a notable exception to the regional trend, Australia's S&P/ASX 200 index fell 2%. The decline followed the release of disappointing trade data for August.

According to the Australian Bureau of Statistics, the country's goods trade surplus narrowed sharply to A$495 million from a revised A$1.351 billion in July. This figure significantly undershot analyst expectations for a surplus of around A$2 billion, as a 5.8% increase in imports outpaced a 3.7% rise in exports.