Asia stocks whipsaw as tech volatility weighs; U.S. jobs data awaited

Asian stocks swung between gains and losses on Thursday as tech stocks remained volatile, while investors awaited U.S. jobs data for clues on the Federal Reserve’s rate path.

S&P 500 and Nasdaq futures also lacked direction in Asian trading after Wall Street closed modestly higher overnight.

Nikkei turns negative as BOJ hike bets lift yen

In Tokyo, the Nikkei 225 last traded 0.2% higher after briefly entering negative territory, while the broader TOPIX index pared gains to trade 0.6% higher.

Stock indexes dithered as the yen strengthened sharply to around 157.6 per dollar.

The currency’s rally followed hawkish comments from Bank of Japan board member Hajime Takata, who said the central bank should raise rates more nimbly to combat inflation.

Markets were now pricing in a near-full chance of a September BOJ hike.

The Nikkei was also aided by gains in trading house stocks.

Mitsubishi Corp (TYO:8058) climbed nearly 4% and financial stocks also advanced, helped by comments from Berkshire Hathaway (NYSE:BRKb) Chief Executive Greg Abel reaffirming the conglomerate’s long-term commitment to its Japanese investments.

Berkshire has stakes of more than 10% in major Japanese trading houses and has signalled it could increase those holdings, reinforcing investor interest in the sector.

Tech vaolatility weighs; U.S. jobs data awaited

South Korea’s KOSPI was much more volatile, swinging sharply between gains and losses. It last traded 0.5% higher after having advanced nearly 2% in early trading.

Samsung Electronics (KS:005930) and SK Hynix (KS:000660) stocks edged lower after a report said Korea Electric Power (KS:015760) had proposed that Samsung pay 20 trillion won ($15 billion) upfront for electricity through 2031, while SK Hynix could be asked to pay 5 trillion won. 

The proposals could raise concerns about near-term cash requirements for the chipmakers as they undertake heavy investment in AI-related infrastructure and semiconductor capacity.

China’s Shanghai Composite and the blue-chip CSI 300 edged 0.3% higher, while Hong Kong’s Hang Seng index fell 0.2%.

Singapore’s Straits Times Index erased nearly 1% gains to trade unchanged. India’s Nifty 50 edged 0.2% higher.

The broader regional mood improved in early trading after U.S. stocks ended higher overnight. U.S. Treasury yields also eased, with the 10-year yield falling to 4.784% after reaching multi-year highs. 

The benchmark 10-year Japanese government bond yield also eased about 5 basis points to 2.97% on Thursday, after briefly crossing the 3% threshold earlier this week for the first time since 1996.

Oil prices edged lower after a three-day rally, although investors remained wary of renewed U.S.-Iran military exchanges and their potential impact on energy supplies.

Attention now turns to Friday’s U.S. nonfarm payrolls report to gauge the Fed’s policy stance. Markets are pricing roughly a two-thirds chance of a 25-basis-point rate hike this month, according to CME Group’s FedWatch tool. 

China services PMI, Australia trade data in focus

China’s RatingDog services PMI released on Thursday rose to 51.4 in August from 50.4 in July, beating the 50.6 forecast.

The private survey pointed to stronger domestic demand, faster new-business growth and a fourth consecutive month of job creation. The reading contrasted with China’s official services gauge, which had signalled contraction.

Elsewhere, Australia’s S&P/ASX 200 ended 0.4% higher. Data showed that the country’s July trade surplus came above expectations, but narrowed from last month, as exports fell 3.3% month-on-month.

Meanwhile, Japan’s services sector expanded at its fastest pace in five months in August, adding to evidence of resilient domestic activity and potentially strengthening the case for further Bank of Japan policy tightening.