Asian shares rise as tech follows Nvidia’s rise; Japan Grows With Weak Inflation By Investing.com

Investing.com– Most Asian stocks were higher on Thursday, as technology shares followed an overnight rally by market darling Nvidia, while Japanese markets rallied as a weak reading of producer inflation undercut dovish signals from the Bank of Japan.

Regional tech stocks rose after their U.S. peers, NVIDIA Corporation (NASDAQ: ) CEO Jensen Huang, spoke of strong demand for artificial intelligence. The gains went mostly to chip makers.

But U.S. stock index futures were flat in Asian trade as a stronger-than-expected reading gave a more serious outlook on interest rate cuts. Markets were seen positioning for a 25 basis point rate cut by next week.

Sectors outside of technology also saw average gains on Wednesday.

Japan outperforms as soft PPI undercuts BOJ’s dovish talk

Japan and indices were by far the best performers in Asia on Thursday, rising between 2% and 3%.

The gains in Japanese stocks came as inflation data read weaker than expected for August.

The reading somewhat undercut recent comments by BOJ officials that interest rates will need to rise further, especially given that any further rate hikes by the BOJ are largely contingent on rising inflation.

The BOJ is set at , with analysts uncertain whether the central bank will raise interest rates again. But lower inflation gives the central bank less immediate impetus to raise rates.

BOJ board member Naoki Tamura said Thursday that the bank needs to raise interest rates to at least 1 percent to avoid inflationary risks.

Tech rallies in Asia, chipmakers drive Nvidia’s growth

A surge in tech stocks also supported Japanese markets, while tech heavyweights in Asia posted relatively stronger gains.

South Korea rose 1.2 percent, while a 4.7 percent gain in Taiwan’s TSMC ( TW: ) ( NYSE: ) boosted the index.

Technology — particularly chipmakers — rose more than 8 percent overnight in Nvidia after comments from its CEO promoted the idea that demand for AI will help support tech valuations even as broader economic conditions deteriorate.

Nvidia suppliers included SK Hynix Inc (KS:) and Advantest Corp. (TYO:) rose 5.4% and 7%, respectively.

Samsung Electronics Co Ltd (KS:) rose 1 percent after a Reuters report said the firm planned global job cuts of up to 30 percent of roles in some divisions.

Beyond technology, gains in Asian markets were much lower. Australia added 0.7%, while India index futures pointed to an average open after the index retreated on Wednesday.

Indexes and China lagged, as did Hong Kong, with all three moving in a flat-to-lower range. Sentiment toward China was hurt by reports that US lawmakers are preparing more trade restrictions on the country.