Asia kicked off September with a tale of two markets. In Tokyo and Seoul, investors trimmed exposure to semiconductor and AI-linked names after a powerful multi-month rally, pushing the Nikkei and the Kospi lower. In Hong Kong, the story flipped: the Hang Seng climbed more than 2% as Alibaba vaulted almost 19% on renewed confidence in its cloud and platform economics. With U.S. exchanges shut for Labor Day, these moves unfolded in thinner cross-border liquidity, amplifying local narratives and setting the stage for a data-heavy week.
The selloff in Japan and Korea looked tactical rather than thematic. Chip equipment suppliers and high-beta technology had become consensus winners of the AI spending cycle, leaving them sensitive to shifts in risk appetite and to any wobble in U.S. tech leadership. Heading into Friday’s U.S. jobs report, traders rotated into lower-volatility profiles and locked in gains. That pattern pulled the Nikkei toward recent support zones and nudged Korean semis off recent highs, even as underlying end-market demand remains anchored by long-cycle capex in data centers and edge computing.
Hong Kong’s advance was driven by a different catalyst: company-specific re-rating. Alibaba’s double-digit pop—its biggest one-day gain in years—reignited debate around the durability of its cloud growth and the margin math across adjacent businesses, from logistics to “instant commerce.” Because Alibaba carries a sizable weight in key Hong Kong indices, that single move powered broader benchmarks higher and spilled over into select Chinese tech names. It also helped counterbalance lingering skepticism about China’s macro backdrop by refocusing attention on earnings delivery and product roadmaps tied to domestic AI.
Macro currents added texture but didn’t dictate the session. Europe’s steady tape and a gold bid suggested investors are still leaning toward an eventual easing path from major central banks, while a softer U.S. dollar provided a small tailwind to Asia risk. For exporters, currency stability is as important as level; a calm dollar typically supports financing conditions without eroding competitive pricing too quickly.
How to trade the split (practical map for global investors):
Monitor leadership breadth: If Hong Kong’s rally broadens beyond one or two megacaps, it strengthens the case for a sustained re-rating in Chinese tech.
Watch semis’ follow-through: In Japan/Korea, look for stabilization in chip equipment and memory names as U.S. data clarify the rate path.
Mind FX and yields: A persistently softer dollar and capped front-end yields t
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