Asian Markets Mixed as Japan Rallies on Trade Hopes, South Korea Slips on Weak GDP

Asian stock markets were mostly steady on Thursday, with Japan leading regional gains amid renewed optimism over U.S.-Japan trade negotiations. However, South Korea underperformed following a surprise contraction in GDP.

Japan Outperforms on U.S. Trade Dialogue

Japanese equities surged, with the Nikkei 225 climbing nearly 1% and the TOPIX advancing 0.8%. The rally was driven by reports that Japan’s Economic Revitalization Minister Ryosei Akazawa is set to travel to the U.S. later this month for a second round of trade talks.

Despite no assurances of exemptions from U.S. tariffs, Japanese officials continue to push for lower duties and greater transparency in trade agreements. Auto stocks led gains, with Toyota Motor Corp jumping over 5% after reports suggested Trump’s 25% auto tariff may exclude parts. Honda Motor Co added 2%.

Gaming giant Nintendo Co Ltd also rallied over 5% following strong demand forecasts for its upcoming Switch 2 console. Renesas Electronics Corp edged up 1.1% despite posting weaker earnings for Q1.

South Korea Lags on Surprise GDP Contraction

South Korea’s KOSPI dropped 0.6% after GDP data revealed a 0.2% quarterly contraction and a 0.1% annual decline, marking the first economic shrinkage in over a year. Analysts attributed the downturn to reduced exports amid escalating U.S.-China trade tensions.

Shares of memory chipmaker SK Hynix, a key Nvidia supplier, dipped slightly even after reporting strong earnings supported by surging AI-related demand.

Broader Asia Sees Cautious Gains

Markets across Asia were generally upbeat, tracking overnight gains on Wall Street. Investor sentiment improved after U.S. President Donald Trump signaled a willingness to reduce tariffs on China and softened his stance toward the Federal Reserve.

• Australia’s ASX 200 rose 0.6%
• Singapore’s Straits Times Index added 0.3%
• Shanghai Composite and CSI 300 indexes gained 0.5% each
• Hong Kong’s Hang Seng slipped 0.4% amid profit-taking in tech stocks

Several major Chinese firms, including BYD and PetroChina, are scheduled to report earnings later this week.

Meanwhile, Indian markets were expected to open slightly lower, with focus shifting to the government’s response following a deadly terrorist attack in Kashmir.

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