Asia markets extend gains, Nikkei hits record high amid Wall Street records; U.S. futures hold steady

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Asia stocks rise on Friday, tracking an overnight rally on Wall Street, buoyed by optimism over potential Fed rate cuts at next week’s meeting. Hong Kong was the strongest performers, while Japan's Nikkei 225 index hit a fresh record high despite political turmoil at home.

Silver climbed 1% toward $42 per ounce on Friday, marking a new 14-year high. Gold rose to around $3,650 per ounce on Friday, moving toward its record high and on track for a fourth consecutive weekly gain.

Japan (NKY:IND [https://seekingalpha.com/symbol/NKY:IND]) rose 0.95% to around 44,700 and the Topix gained 0.5% to 3,165 on Friday, with Japanese equities hitting fresh record highs. The Japanese yen [https://seekingalpha.com/symbol/USD:JPY#hasComeFromMpArticle=false#source=section%3Amain_content%7Cbutton%3Abody_link%7Cfirst_level_url%3Anews] weakened to around 147.4 per dollar on Friday, giving up the prior session’s gains, after the US and Japan issued a joint statement reiterating that exchange rates should remain market-driven and that excessive volatility is undesirable.

Japan's industrial production declined by 1.2% month-over-month in July [https://seekingalpha.com/news/4494284-japans-industrial-production-falls-12-in-july-amid-trade-uncertainty-japan-and-us-reaffirm-g7-currency-policy], a slight improvement from the preliminary forecast of a 1.6% drop. The decline, which reverses a 2.1% gain from the previous month, marks the steepest drop since November 2024.

Separately, the U.S. and Japan renewed their G7 commitments on currency policy, stressing that exchange rates should remain market-driven, according to a joint statement.

China (SHCOMP [https://seekingalpha.com/symbol/SHCOMP]) rose 0.06% to above 3,880 and the Shenzhen Component added 0.3% to 13,020 on Friday, with mainland equities hitting multi-year highs in line with gains across global markets., and the offshore yuan [https://seekingalpha.com/symbol/USD:CNY#source=url_first_level%3Amarket-news%7Csection%3Aglobal%7Csection_asset%3Afull_story%7Cbutton%3Abody_link] weakened to around 7.11 per dollar on Friday, as renewed trade concerns weighed on sentiment

China has warned Mexico against its proposed tariff hike on Asia-made vehicles, particularly Chinese cars, from 20% to 50%. “We hope Mexico will be extremely cautious, and think twice before acting,” the Ministry of Commerce said.

According to recent reports, the U.S. is urging G7 nations to impose significant tariffs—between 50% and 100%—on goods from both China and India. This move is a response to their ongoing purchases of Russian oil and is part of a broader strategy to pressure Russia into peace negotiations over the conflict in Ukraine.

Hong Kong (HSI [https://seekingalpha.com/symbol/HSI]) rose 1.31% to 26,405 in Friday morning's trade, reversing losses in the prior session and hitting their highest in over four years.

India (SENSEX [https://seekingalpha.com/symbol/SENSEX]) rose 0.37% to 81,731 in morning trade on Friday, gaining for the fifth straight session and hitting their highest level since August 21.

Renewed hopes for trade talks between US President Donald Trump and Indian Prime Minister Narendra Modi also lifted sentiment.

However, traders remained cautious ahead of India’s August inflation data, due later today

Australia (AS51 [https://seekingalpha.com/symbol/AS51]) rose 0.68% to around 8,870 in Friday morning trade, reversing losses from the previous session. The Australian dollar [https://seekingalpha.com/symbol/AUD:USD#hasComeFromMpArticle=false#source=section%3Amain_content%7Cbutton%3Abody_link%7Cfirst_level_url%3Anews] dipped to around $0.67 on Friday but hovered near its highest level since early November 2024.

In the U.S. on Thursday, all three major indexes ended higher [https://seekingalpha.com/news/4494126-sp500-nasdaq-composite-dow-jones-stock-market-news] to record closes, expecting that ongoing inflation won’t prevent the Fed from easing rates next week.

U.S. stock futures were flat on Friday, after the major indexes surged to fresh records in the prior session: Dow +0.04%; S&P 500 +0.03%; Nasdaq +0.10%.

CURRENCIES: (JPY:USD [https://seekingalpha.com/symbol/JPY:USD]), (CNY:USD [https://seekingalpha.com/symbol/CNY:USD]), (AUD:USD [https://seekingalpha.com/symbol/AUD:USD]), (INR:USD [https://seekingalpha.com/symbol/INR:USD]), (HKD:USD [https://seekingalpha.com/symbol/HKD:USD]), (NZD:USD [https://seekingalpha.com/symbol/NZD:USD]).

MORE ON ASIA:

Japan’s industrial production falls 1.2% in July amid trade uncertainty; Japan and U.S. reaffirm G7 currency policy [https://seekingalpha.com/news/4494284-japans-industrial-production-falls-12-in-july-amid-trade-uncertainty-japan-and-us-reaffirm-g7-currency-policy#source=url_first_level%3Amarket-news%7Csection%3Amarket-pulse%7Csection_asset%3Anews_title]

Japan's producer prices accelerate in August, up 2.7% Y/Y [https://seekingalpha.com/news/4493937-japans-producer-prices-accelerate-in-august-up-27-yy#source=url_first_level%3Amarket-news%7Csection%3Amarket-news%7Csection_asset%3Anews_title]

China's consumer prices fall by 0.4% in August, producer prices decline for 35th straight month [https://seekingalpha.com/news/4493575-chinas-consumer-prices-fall-by-04-in-august-producer-prices-decline-for-35th-straight-month#source=url_first_level%3Amarket-news%7Csection%3Amarket-news%7Csection_asset%3Anews_title]

China posts higher-than-expected trade surplus despite weakening exports [https://seekingalpha.com/news/4492921-china-posts-higher-than-expected-trade-surplus-despite-weakening-exports#source=url_first_level%3Amarket-news%7Csection%3Amarket-pulse%7Csection_asset%3Anews_title]

Japan's upward GDP revision contrasts with political uncertainty after Ishiba's resignation [https://seekingalpha.com/news/4492925-japans-upward-gdp-revision-contrasts-with-political-uncertainty-after-ishibas-resignation#source=url_first_level%3Amarket-news%7Csection%3Amarket-news%7Csection_asset%3Anews_title]