Asia markets rally as Japan bond yields surge, Alibaba jumps on AI push

Asian markets traded mostly higher on Thursday, following overnight gains on Wall Street after US President Donald Trump delayed tariffs on select automakers.

Japan’s Nikkei 225 led the region’s gains, while South Korean and Chinese equities saw positive momentum. Investor sentiment was further bolstered by China’s decision to expand its fiscal deficit and Alibaba’s latest AI push, which sent its stock soaring.

Meanwhile, Japanese bond yields surged to their highest level in nearly 16 years, reflecting expectations of tighter monetary policy.

Japan’s Nikkei leads gains

Japan’s Nikkei 225 climbed 1%, while the Topix gained 1.3%.

Japanese government bond yields surged, with the 10-year JGB yield hitting its highest level since 2009, reaching 1.5%.

The 30-year yield also rose to 2.5%, its highest since 2008, amid a global bond sell-off and expectations of a policy shift by the Bank of Japan.

Meanwhile, Japanese automakers surged after the White House granted a temporary tariff exemption under the United States-Mexico-Canada Agreement (USMCA). Shares of Honda rose 2%, while Nissan gained 1.99% and Mazda advanced 2.64%.

South Korea inflation cools as Kospi advances

South Korea’s Kospi gained 0.9%, while the Kosdaq dropped 0.75%. Inflation in the country eased for the first time in four months, with February CPI rising 2% year-on-year, slightly above economists’ forecasts but lower than January’s 2.2%.

The slowdown could provide room for the Bank of Korea to consider rate cuts amid economic uncertainties.

Meanwhile, Hong Kong’s Hang Seng Index jumped 2.47%, while China’s CSI 300 rose 0.6% after Beijing raised its fiscal deficit target to 4% of GDP.

This marks a significant shift in China’s economic policy, signaling stronger government support for economic recovery.

Hong Kong-listed shares of CK Hutchison surged 12.3% after Trump praised a BlackRock-led transaction to acquire the company’s Panama Canal port holdings.

The deal, seen as a strategic move amid rising U.S.-China trade tensions, has fueled investor confidence in CK Hutchison’s global operations.

Alibaba stock jumps 7% after AI model release

Shares of Alibaba soared 7% in Hong Kong after the e-commerce giant open-sourced its QwQ-32B AI model on Thursday.

The company claims its model rivals DeepSeek’s R1, further strengthening its position in the AI race.

Alibaba has been aggressively expanding its AI cloud business, following the launch of its Qwen 2.5-Max foundation model.

Seven & i Holdings rises on leadership change reports

Shares of Seven & i Holdings climbed 2% amid reports that the company is set to announce a major business restructuring and a leadership change.

Stephen Dacus, the lead outside director, is expected to replace Ryuichi Isaka as CEO.

The restructuring comes after the company’s founding family failed to secure financing for a buyout of its convenience store operations.

With China ramping up fiscal stimulus, AI stocks gaining traction, and Japan’s bond market signaling a policy shift, Asian markets are at a pivotal point.

Investors will closely watch central bank decisions and geopolitical developments in the coming weeks to gauge the region’s growth trajectory.

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