Why Asia’s markets diverged on Sept. 1, 2025: Hang Seng up on Alibaba, Nikkei down on tech profit-taking, and what U.S. payrolls could change

Asia kicked off September with a story in two acts. In Hong Kong, a heavyweight e-commerce and cloud leader jumped almost 19%, dragging the Hang Seng more than 2% higher and extending a month-long rebound tied to AI. In Japan and South Korea, the tone flipped: the Nikkei 225 slipped as investors took profits in AI-linked chip equipment and a major tech holding company, while the Kospi faded in sympathy. The common denominator wasn’t a single headline; it was positioning into a week when U.S. nonfarm payrolls can reset the global rate path.

Start with Hong Kong and the mainland. China’s equity bid has been anchored by domestic liquidity, a steadier manufacturing PMI backdrop, and rising confidence that Beijing will incubate home-grown AI chips and software. That cocktail has forced global allocators to revisit underweights in MSCI Asia ex-Japan—especially when the U.S. dollar softens on rising rate-cut odds. Monday’s surge in a single index heavyweight amplified everything: benchmark duration lengthened, passive flows followed the leader, and risk appetite broadened into cloud, internet, and hardware supply-chain names.

Japan showed the other side of the trade. After a summer sprint, profit-taking hit Advantest-style chip equipment and SoftBank-type AI proxies, knocking the Nikkei lower. Nothing about the day said “cycle over”; it said “risk budget tighter until we see the U.S. data.” The Kospi echoed that caution, as investors balanced stronger semiconductor export prints against uncertainty around tariffs and the Fed. Southeast Asia was mixed, with Jakarta wobbling amid domestic politics.

Two macro threads explain why this divergence can persist—or snap back:

The U.S. data cascade. ISM, JOLTS, ADP, jobless claims, and payrolls will either validate cooling labor demand and average hourly earnings or challenge it. A benign sequence supports lower real yields, a softer DXY, and ongoing leadership in Asia’s duration-sensitive and growth pockets. A hot wages or prices-paid surprise would do the opposite.

Tariff uncertainty. An appellate ruling curbing national-emergency tariffs (pending likely Supreme Court review) complicates negotiation timelines with Japan and South Korea. For Asia’s exporters, the difference between delayed clarity and policy reversal is the difference between re-rating margins now versus later.

Trading takeaways:

• Into payrolls, expect higher intraday ranges and quick factor rotations. If rate-cut odds stay high and the dollar stays soft, dips in Nikkei tech, Kospi semis, or Hang Seng internet have tended to find sponsorship.

• Watch real-time FX. A sustained push lower in DXY typically eases global financial conditions for Asia ex-Japan.

• Track breadth. If Monday’s Hong Kong rally broadens beyond one mega-cap and into mid-caps and hardware suppliers, it signals healthier under-the-surface demand.

Bottom line: Asia’s split wasn’t confusion; it was positioning. A mega-cap catalyst pulled Hong Kong higher while the Nikkei and Kospi waited for the macro referee. By the end of the week, U.S. payrolls will decide whether that divergence widens—or snaps back in a hurry.