KOSPI jumps, Nikkei hesitates as Asia tests whether the bond rout is over

Asian stocks recovered on Thursday as a pause in the global bond selloff brought buyers back to South Korea and Japan, although the rebound remained cautious ahead of Friday’s US jobs report.

The KOSPI climbed 1.4% to 6,654.76 by late morning, clawing back part of Wednesday’s 3.99% plunge, while the Nikkei 225 edged about 0.1% higher to 64,374.

Lower Treasury and Japanese government bond yields eased pressure on technology valuations, while Brent crude slipped towards $95.

The broader MSCI Asia-Pacific index excluding Japan gained about 0.5%, extending the relief move across the region.

KOSPI rebounds as chip heavyweights find buyers

South Korea led the recovery after suffering one of Asia’s sharpest declines on Wednesday.

Samsung Electronics gained 1.4% and SK Hynix rose about 1%, helping the technology-heavy KOSPI recover from a two-week low. Hyundai Motor advanced 1.5%, while LG Energy Solution jumped almost 5%.

The rebound came despite continued selling by foreign investors, who offloaded about 300 billion won of shares by late morning. Institutions were modest net buyers.

That suggests Thursday’s advance is still more of a relief rally than a decisive return of overseas risk appetite.

Sentiment improved after Wall Street finished higher overnight and oil prices eased from six-week highs.

The Dow gained 0.56%, while the Nasdaq rose 0.45%, helping stabilise semiconductor shares after the previous session’s global rates shock.

Nikkei 225 gets relief from falling bond yields

Japan’s Nikkei 225 produced a more restrained rebound as lower bond yields supported equities but renewed Bank of Japan tightening expectations capped enthusiasm.

The 10-year Japanese government bond yield fell about 4.5 basis points to 2.965%, retreating from Wednesday’s multi-decade high.

Mitsubishi Corp. gained 3.6% and Nomura Holdings advanced 2.5%, leaving trading houses and financial shares among Tokyo’s strongest performers.

The yen also strengthened towards 158 per dollar.

UOB economists, cited by The Wall Street Journal, said recent comments from BOJ board member Hajime Takata left open the possibility of larger or back-to-back rate increases.

That keeps Japanese equities caught between relief from lower market yields and the prospect of tighter official policy.

Japan’s economic data reinforced that tension. The August services PMI rose to 52.5 from 51.2, its strongest reading in five months.

S&P Global Market Intelligence economist Annabel Fiddes said stronger activity combined with persistent cost pressures strengthened the argument for another BOJ increase.

Payrolls will decide whether the relief rally lasts

The next test for both the KOSPI and Nikkei is Friday’s US nonfarm-payrolls report.

Treasury yields retreated after weaker-than-expected private-sector employment data, while New York Fed President John Williams indicated there was not yet clear evidence that another immediate rate increase was necessary. That helped calm fears of aggressive tightening.

Brent slipped about 0.4% to $95.21 and WTI eased to $90.74, though Middle East tensions remain a risk after the latest US-Iran strikes.

Elsewhere, Hong Kong’s Hang Seng rose about 0.7%, while S&P 500 futures were roughly flat. Euro Stoxx 50, DAX and FTSE futures were also little changed to slightly lower.