Asian Stocks Climb on US AI Optimism; Japan’s Nikkei Reaches New Record High

• Asian stocks rise; Nikkei hits 44,288 record; Shanghai up 1.1%, CSI 300 nears 2%.

• S&P 500, Nasdaq hit record highs; Oracle rallies; Fed rate cut expected in September.

• U.S. PPI falls 0.1%, Fed rate cut expected; mixed Asian markets; US-Japan tariff deal boosts confidence.

Most Asian stock markets climbed on Thursday, with China leading gains fueled by renewed optimism around U.S. artificial intelligence developments. Japan’s Nikkei 225 surged over 1% to a new record high of 44,288.47 points, crossing the 44,000 mark for the second time this week. This rally followed Prime Minister Shigeru Ishiba’s resignation amid election setbacks and internal party disputes, raising expectations for more expansionary fiscal and monetary measures from his successor. The broader TOPIX index rose 0.2%, just below recent record levels.

In China, the Shanghai Composite gained 1.1%, while the CSI 300 advanced nearly 2%. Hong Kong’s Hang Seng index trimmed earlier losses to close down 0.3%, holding close to a four-year peak, supported by chip stock recovery.

U.S. equities continued their upward momentum on Wednesday with the S&P 500 and Nasdaq Composite both hitting record closing highs for a second day in a row, driven by a strong rally in Oracle and other AI-related stocks. This positive investor sentiment was further supported by expectations that the Federal Reserve will reduce interest rates at its September meeting. During Asian trading hours on Thursday, U.S. stock futures edged slightly higher, reflecting cautious optimism around upcoming economic data.

Market participants closely awaited U.S. consumer price inflation figures due later on Thursday, following Wednesday’s reported unexpected 0.1% decline in producer price inflation for August. This easing in inflation strengthened arguments for a 25 basis point rate cut by the Federal Reserve at its September 17 meeting. The consumer price data is seen as crucial in determining the pace and magnitude of future Fed policy easing.

Meanwhile, the U.S.-Japan agreement to reduce tariffs on Japanese auto exports by mid-September also helped bolster investor confidence in the region. Other regional indexes were mixed: South Korea’s KOSPI rose 0.4%, Singapore’s Straits Times Index remained flat, Australia’s S&P/ASX 200 fell 0.5%, and India’s Nifty 50 opened steady.