Highlights:

– Nikkei 225 fell 0.88% while Shanghai Composite dropped 1.16%
– Hong Kong’s Hang Seng declined 0.60%, extending recent volatility
– India’s Sensex and South Korea’s Kospi advanced, highlighting divergence across Asia

Asian equities opened Thursday, September 4, on a mixed note as investors weighed currency market shifts and fresh signs of economic cooling in China. Gains in India and South Korea provided balance, but weakness in Japan and Australia underscored regional challenges tied to global growth, commodity trends, and monetary policy expectations.

Japan and China Lead the Declines

The Nikkei 225 dropped 0.88% to 41,938.89, retreating from record highs seen earlier in the summer. Persistent yen weakness, with the Japanese Yen Index edging down to 67.54 (+0.18%), reflects the Bank of Japan’s reluctance to move aggressively on rates compared to global peers. However, currency depreciation is no longer providing the same boost to exporters, with investor concern shifting toward margin pressures and import costs.

Meanwhile, in mainland China, the Shanghai Composite (000001.SS) fell 1.16% to 3,813.56, signaling ongoing investor unease over sluggish domestic demand and policy execution. Despite recent liquidity measures from Beijing, traders remain cautious about whether stimulus will be sufficient to stabilize growth and corporate earnings in the second half of the year.

Hong Kong and Australia Face Pressure

Hong Kong’s Hang Seng Index slid 0.60% to 25,343.43, extending a volatile run amid heavy positioning in tech and financials. Investor confidence remains fragile given property sector headwinds and regulatory uncertainty around major Chinese technology companies.

In Australia, the S&P/ASX 200 fell sharply by 1.82% to 8,738.80, the steepest decline among major Asian benchmarks. A stronger Australian Dollar Index (+0.39% to 65.40) raised concerns about export competitiveness, while falling commodity prices weighed on resource-heavy sectors. Traders also remain sensitive to expectations that the Reserve Bank of Australia could take a more cautious approach in monetary tightening, balancing inflation risks with slowing domestic demand.

India and South Korea Offer Regional Support

In contrast to the broader weakness, India’s S&P BSE Sensex gained 0.51% to 80,567.71, supported by resilience in financials and IT stocks. India’s growth narrative continues to stand out across Asia, underpinned by strong domestic consumption and increasing foreign inflows.

South Korea’s Kospi Composite Index advanced 0.38% to 3,184.42, driven by semiconductor and tech sector momentum. The country’s export-driven economy remains closely linked to global demand for electronics and AI infrastructure, positioning the Kospi as a beneficiary of structural technology trends despite cyclical risks.

Regional Divergence Reflects Global Uncertainty

The session highlighted a deepening divergence across Asia:

* Strength in India and South Korea, backed by sectoral tailwinds and relative macro stability.
* Weakness in Japan and Australia, where currency and commodity headwinds cloud sentiment.
* Persistent caution in China and Hong Kong, reflecting structural challenges in property, consumption, and policy credibility.

Investors remain attentive to global cues, particularly from U.S. markets, where expectations of Federal Reserve policy shifts continue to influence capital flows. A stronger dollar environment adds complexity for Asian central banks as they balance inflation control with growth considerations.

Looking ahead, market participants will monitor whether Beijing introduces additional targeted support for its property and consumer sectors, as well as whether Japanese policymakers move more decisively to address currency volatility. In Australia, commodity trends and currency strength will remain in focus, while India and South Korea appear better positioned to sustain momentum heading into the final quarter of the year.

Asian markets are expected to remain volatile in the coming sessions, reflecting the interplay of global monetary policy, energy prices, and local economic resilience. For investors in Israel and globally, the divergence across Asia underscores the need to track country-specific catalysts as well as broader macroeconomic risks shaping regional performance.