Asian shares rise on rate cut speculation; Japan is behind Investing.com

Investing.com– Most Asian stocks rose on Friday as attention turned to the Federal Reserve’s first potential interest rate cut in more than four years, with Hong Kong markets leading gains on bargain buying in companies local technologies.

Japanese shares lagged their regional peers after seeing swings this week amid weak inflation signals and solicited comments from the Bank of Japan. A BOJ meeting next week is also in focus.

Regional markets followed some overnight gains on Wall Street, where investors looked past sticky inflation prints amid lingering bets on a Fed rate cut when it . Steady buying in the tech sector has also helped.

US stock index futures were flat in Asian trade.

Tech-backed Hong Kong, flat Chinese markets

Hong Kong’s index was Asia’s best performer on Friday, extending a rally into a third session as traders bought local internet stocks at deep discounts.

But Chinese markets were far less bullish, with indexes also marginally higher from more than seven-month lows hit earlier this week.

Sentiment toward China remained tense following a string of middling economic readings from the country for August. The prospect of more US trade restrictions also weighed.

Japanese stocks lag, BOJ and inflation in focus

Japan and indexes fell about 0.9 percent each Friday, lagging regional peers.

Both indexes were set for a quiet end to the week after swinging wildly as investors weighed some soft signals on inflation and dovish comments from BOJ officials.

BOJ officials have warned that the central bank is likely to raise interest rates in tandem with stronger inflation. But weak producer price index inflation somewhat undermined that message.

The BOJ is , although investors are uncertain about another rate hike from the bank. Japanese consumer inflation data is also due next week.

Asian shares were mixed on speculation over 25.50 bps

Broader Asian markets were mixed amid speculation over whether the Fed will cut rates by 25 or 50 bps next week. While some strong inflation readings pushed the case for a smaller rate cut, signs of weakness in the labor market brought bets on a 50 bps cut back into play.

Traders priced in a 56% chance of a 25bps decline and a 44% chance of a 50bps decline.

Australia rose 0.3%, while South Korea fell 0.3%.

Indian index futures indicated a slightly negative open after the index touched a record high on Thursday. Indian stocks have outperformed most globally in recent weeks amid persistent optimism over Indian economic growth.