Japan Tankan, US PPI, South Korea Unemployment

Asia-Pacific markets extended gains on Wednesday after U.S. producer prices came in weaker than expected for July.

The producer price index, a measure of wholesale inflation, rose 0.1% last month. Economists had expected the reading to show a monthly gain of 0.2% in July, in line with the previous month’s reading, according to Dow Jones Consensus Estimates.

Investors will shift their attention to the July U.S. consumer price index data, due out on Wednesday.

In South Korea, the country’s seasonally adjusted unemployment rate fell to 2.5% from 2.8% in July, hitting its lowest point since October 2023.

In Japan, manufacturing sentiment became slightly less optimistic in August than in the previous month, according to a Reuters Tankan survey.

The Tankan survey, which follows the Bank of Japan’s quarterly survey of the same name, showed the sentiment index for manufacturers slipping to +10 in August, while the non-manufacturing index fell to +24. Both metrics were at +11 and +26 in the July survey.

This is due to weak demand from China, which has weighed on business sentiment, Reuters reported, noting that this survey also comes after the Bank of Japan raised its benchmark interest rate in July, to the highest level since 2008.

Separately, the Reserve Bank of New Zealand cut its benchmark rate to 5.25%, surprising economists’ expectations according to a Reuters poll, who had previously forecast the central bank would keep rates at 5.5%.

Japan Nikkei225 rose 1.05%, while the broader Topix rose 1.53%.

South Korea’s Kospi rose 0.99%, while the small-cap Kosdaq jumped 1.64%.

Australia’s S&P/ASX 200 Index rose less, up 0.82%.

On Wednesday morning, the country’s securities regulator sued the ASX for “making misleading statements” in relation to its Clearing House Electronic Subregister System, or CHESS, a computer system used to settle trades on the exchange.

The Australian Securities and Investments Commission noted that the ASX had said the CHESS replacement project was “on track”, but at the time of the announcement “the project was not progressing as planned and the ASX had no reasonable basis to assert that it was on track to meet future milestones”.

from Hong Kong Hang Seng Index rose 0.26%, but China’s CSI 300 index fell marginally, the only major index in negative territory.

In the United States, stocks rallied overnight and approached last month’s record levels following the PPI report.

The Dow Jones Industrial Average rose 1.04% to 39,765.64, while the tech-heavy Nasdaq Composite jumped 2.43%.

The S&P 500 Index rose 1.68%, remaining within about 5% of its all-time high reached in July.

—Vscek’s Brian Evans and Sarah Min contributed to this article.