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Japan's Nikkei 225 Rises Around 2% on Return to Trade; Asia Shares Mixed

Kazuhiro Nogi | AFP via Getty Images
  • Shares in the Asia-Pacific were mixed on Friday following strong gains in the previous session as investors digested the U.S. inflation report.
  • Thailand's market is closed for a holiday Friday.
  • SoftBank shares rose more than 6% on news that it would add 4.6 trillion yen ($34.5 billion) to its pre-tax gains by reducing its stake in Chinese tech giant Alibaba.

SINGAPORE — Japan stocks surged on return to trade, while shares in the Asia-Pacific were mixed on Friday following strong gains in the previous session as investors digested the U.S. inflation report.

The Nikkei 225 jumped 2.62% to 28,546.98, while the Topix index rose 2.04% to 1,973.18. Japanese markets were closed Thursday for a holiday.

Japan's Prime Minister Fumio Kishida on Friday said he will ask his government to come up with ways to address rising fuel and food prices in the country, Reuters reported. Inflation in Japan is not as hot as in other countries, but is hovering above the central bank's 2% target.

In Australia, the S&P/ASX 200 shed 0.54% to 7,032.5.

South Korea's Kospi was 0.16% higher at 2,527.94, while the Kosdaq was fractionally lower at 831.63.

Shares of Samsung Electronics rose 0.5% as South Korea's president, Yoon Suk-yeol, officially pardoned the company's vice chairman, Jay Y. Lee.

"I will live up to the country's expectations and the government's considerations and revitalization the economy by sustained investment and job creation for young people," Lee said, according to a CNBC translation.

Mainland China markets dipped. The Shanghai Composite shed 0.15% to 3,276.89 while the Shenzhen Component lost 0.44% to 12,419.39.

China's largest chipmaker Semiconductor Manufacturing International Corporation reported a net profit of $514 million in the second quarter of 2022, a 25% drop from the same period a year ago. Revenue grew 42% to $1.9 billion.

SMIC's Hong Kong-listed shares were 4.18% lower in the final hour of trade. The broader Hang Seng index was 0.24% higher in the late afternoon.

MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.12%.

Thailand's market is closed for a holiday Friday.

"If you look at the valuation itself, Asian equities is actually not expensive. But I think there are growth downside risks, particularly for China and that, I think, will keep a lid on the overall market performance," Eddy Loh, chief investment officer at Maybank Group Wealth Management, told CNBC's "Squawk Box Asia" on Friday, explaining Maybank's neutral stance on Asia stocks.

Overnight in the U.S., major indexes struggled for direction before closing mixed.

The S&P 500 was fractionally lower at 4,207.27, while the Nasdaq Composite shed 0.58% to 12,779.91. The Dow inched 27.16 points, or 0.08%, higher to 33,336.67. The three major averages opened the session higher but lost steam as the day progressed.

"Financial markets initially reacted positively to the Producer Price Index data that showed inflation in the U.S. is moderating, but gains then whittled away on concerns the market may have overreacted," according to an ANZ Research note on Friday.

The PPI for July dropped 0.5% from June, compared with an expected 0.2% rise, according to a Dow Jones survey.

In corporate news, Credit Suisse has reportedly applied to begin formal legal proceedings in the English High Court against Japanese tech company SoftBank Group over a $440 million dispute.

But SoftBank shares rose 5.55% on Friday on news that it would add 4.6 trillion yen ($34.5 billion) to its pre-tax gains by reducing its stake in Chinese tech giant Alibaba. The company said the move would "further strengthen our defense against the severe market environment," according to a press release.

Currencies and oil

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 105.257 after a recent drop from above 106.

The Japanese yen traded at 133.35 per dollar, after strengthening earlier this week. The Australian dollar was at $0.7123, above the $0.71 level.

Oil futures turned slightly positive in Asia's afternoon trade.

U.S. crude futures gained 0.04% to $94.38 per barrel, while Brent crude futures added 0.29% to $99.89 per barrel.

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