Asian stocks were mixed on Friday, with Japan’s Nikkei 225 pushing higher while South Korea’s Kospi remained closed for Chuseok, leaving two of the region’s most closely watched markets in sharply different positions as global bond yields surged.
The Nikkei rose about 1.3%, extending its rebound after Japan’s holiday break, while the broader Topix gained roughly 1.2%.
The Kospi last traded on Wednesday, when it closed 0.9% higher at 7,080.92 after giving back much of an early gain of almost 2%.
That pause means Korean investors will return to a tougher global rates backdrop than when Seoul shut.
Nikkei rises despite Japan’s own yield shock
Japanese equities have so far absorbed the bond selloff better than most regional peers.
The Nikkei advanced even as Japan’s 10-year government bond yield climbed four basis points to 3.115%, its highest since 1996.
Higher sovereign yields raise the discount rate applied to future earnings, a particular challenge for richly valued technology shares.
Yet a weaker yen and renewed demand for large Japanese technology names helped keep the market in positive territory.
JPMorgan strategists led by Mislav Matejka said in a note cited by MarketWatch this week that strong profit margins and relatively healthy corporate balance sheets should continue to support equities in the US, Europe and Japan despite elevated yields.
Kospi faces a delayed test after Chuseok
The Kospi’s closure has temporarily shielded Seoul from Friday’s jump in borrowing costs, but the pressure has merely been deferred.
On Wednesday, foreign investors sold a net 534.4 billion won of Korean shares and retail investors sold 1.42 trillion won, while institutions bought 320.3 billion won.
Samsung Electronics gained 3.25% and SK Hynix rose 1.2%, helping the Kospi finish higher before the holiday.
The next session will test whether Korea’s semiconductor-heavy market can retain that momentum if oil and bond yields stay elevated.
Daishin Securities researcher Lee Kyoung-min told The Korea Times earlier this month that higher crude prices and US Treasury yields had already weakened demand for riskier Korean assets.
Five percent US yields reset Asia’s valuation hurdle
The broader pressure is coming from the US bond market.
The 10-year Treasury yield traded near 5.19% after touching 5.2251%, while the 30-year yield reached 5.5016%, its highest since 2004. Fed funds futures were pricing a 71% chance of another rate rise next month.
Nigel Green, chief executive of deVere Group, argued in comments published by Investing.com that risk assets face a much tougher valuation comparison once risk-free US yields move above 5%.
Elsewhere, Hong Kong’s Hang Seng fell about 1% and Australia’s benchmark slipped 0.6%, while mainland China and Taiwan were also closed for holidays.
MSCI’s broad Asia-Pacific index outside Japan was little changed.
Brent crude eased 0.8% to $105.75 a barrel after jumping 3% overnight following a Houthi missile attack on Saudi Arabia. The dollar was heading for a roughly 1% weekly gain.
Markets were also assessing Thursday’s White House meeting between US President Donald Trump and Chinese President Xi Jinping.
The two sides agreed to extend their trade truce by two months, but significant differences remained over trade, AI, Taiwan and Iran.
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