Early morning rally fizzled in Tokyo after investors turned cautious and debated the future rate path. Tech stocks and industrial exporters traded down, but banks advanced. The yen held firm but retained an upward bias in volatile trading.

Weak earnings added to the ongoing worries of a weakening economic backdrop and faltering consumer sentiment. Banks and real estate developers extended declines, but tech stocks held up.

Japan's capital spending in the second quarter accelerated from the first quarter and extended the increase for the thirteenth quarter in a row. Manufacturing sector activities remained in contraction in August amid weak trends in export orders from key markets.

Market indexes in China declined following the weak reading on the manufacturing sector and the latest batch of corporate results.

Japan's benchmark indexes erased August losses, and the yen stabilized after surging following the hawkish shift by the Bank of Japan. Japan's jobless rate increased, and Tokyo-area inflation accelerated for the fourth month in a row.

Benchmark indexes in Hong Kong jumped to a seven-week high as investors returned to acquire beaten-down tech and electric vehicle maker stocks.

Market indexes in Tokyo declined for the third day in a row amid a weakness in semiconductor stocks. The yen traded in a tight range after comments from BOJ Deputy Governor calmed market nerves.



Electric vehicle makers Li Auto and BYD reported shrinking gross margins amid an intense price war. Meituan said sales and earnings jumped despite the escalation of the price war. China Mengniu announced a stock repurchase plan. 

Stocks in Tokyo turned volatile, and semiconductor equipment makers were in focus ahead of the release of quarterly results from Nvidia Corp. Retailers edged lower after the yen rebounded. Ocean freight shipping companies traded down amid rising violence in the Middle East. 

Benchmark indexes in Shanghai and Hong Kong traded lower amid a weak earnings outlook and fragile economic recovery. Anta Sports announced a stock buyback plan and sharply increased its interim dividend. Nongfu Spring reported the slowest increase in earnings in the first half since its listing in 2020. 

SBI Cards and Payment Services said its chairman has resigned. Godrej Agrovet acquired the remaining stake in its partnership with U.S.-based Tyson Foods. PNC Infratech won an order to build a bridge in Uttar Pradesh. 

The pullback in the yen supported the advance in Tokyo's benchmark indexes, and investors awaited the release of Tokyo area inflation, housing starts, and job market updates.

Mixed earnings and economic growth worries kept investor sentiment in check, and market indexes struggled to stay above the flatline in Hong Kong and Shanghai. Trip.com and PetroChina were in focus after earnings releases.

The steady recovery in the yen kept stocks under pressure in Tokyo amid the worry of another rate hike after hawkish comments from Bank of Japan Governor Kazuo Ueda.



Stocks in Hong Kong advanced in the hopes of a possible rate in three weeks, following possible monetary policy adjustments by the U.S. Federal Reserve. However, market sentiment remained weak on mainland exchanges.