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The Nikkei 225 index jumped 0.9% to its strongest level since late-December, buoyed by strong earnings from Nissan (OTC:NSANY) Motor Co., Ltd. (TYO:7201) and Honda Motor Co Ltd (TYO:7267), which rose 4% and 5%, respectively.
The automakers added to a string of strong Japanese earnings prints this week, with surprise beats from firms such as Toyota Motor (NYSE:TM) Corp (TYO:7203) and Nintendo Co Ltd (TYO:7974), while the country’s five biggest trading houses logged bumper profits.
But shares of investment giant SoftBank Group Corp. (TYO:9984) sank 3% after the firm logged a second consecutive annual loss.
The strong run of Japanese earnings show that economic headwinds from slowing growth and high inflation have so far had a limited impact on corporate profits, indicating that the Japanese economy is still running steady.
The Nikkei was also supported by recent signals from the Bank of Japan that it plans to maintain its ultra-dovish monetary policy for the time being.
But Japanese stocks were the outlier on Friday, with most other Asian markets trading lower on concerns over slowing growth in the world’s largest economies.
China’s Shanghai Shenzhen CSI 300 and Shanghai Composite indexes fell 0.6% and 0.4%, respectively, as disappointing trade and inflation data this week raised more doubts over a potential post-COVID economic rebound in the country this year.
While Beijing is likely to release more stimulus measures to shore up economic growth in the coming months, a string of data released this month showed that the Chinese economy is cooling after an initial bounce in the first quarter.
Weakness in China also bodes poorly for broader Asian economies with high trade exposure to the country.
Hong Kong’s Hang Seng index fell 0.1% on Friday, while South Korea’s KOSPI lost 0.5%.
Australia’s ASX 200 index shed 0.2%, pulled lower by losses in heavyweight mining stocks as concerns over China triggered a crash in metal prices.
Broader Asian markets sank as softer-than-expected U.S. labor data pushed up concerns over a potential recession. But sticky inflation data also saw markets dialing back their expectations for any potential interest rate cuts by the Fed this year.
With U.S. interest rates now likely to stay higher for longer, any major upside in Asian markets is expected to be limited as investors avoid risk-heavy assets.
