On Friday, Japanese equities outperformed their Asian counterparts as investors reacted positively to a truce between Washington and Beijing, which followed a meeting between President Donald Trump and Chinese President Xi Jinping. A trade agreement was tentatively established during a critical meeting in South Korea on Thursday, alleviating tensions surrounding rare earth elements that had the potential to escalate into a significant trade conflict between the world’s two largest economies. “Both sides appear to be maintaining leverage for future negotiations by keeping these measures as bargaining chips,” stated Chaoping . Japan’s Nikkei 225 experienced an increase of more than 2%, reaching a new record of 52,411.34, while the Topix rose by 0.94% to 3,331.83, also achieving a new high. Panasonic Holdings experienced a decline of more than 8% in its share price, as it revised its full-year operating profit forecast downward by 13.5% on Thursday. The company attributed this adjustment to diminished earnings from its crucial energy division, which provides batteries to Tesla and various other automotive manufacturers.

South Korea’s Kospi increased by 0.5%, reaching a new peak of 4,107.5 after Thursday’s record performance. The small-cap Kosdaq experienced an increase of 1.07%, reaching a level of 900.42. South Korean technology stocks experienced a notable increase following the announcement from U.S. chipmaker Nvidia regarding its partnership with the South Korean government to enhance the country’s AI infrastructure, involving the deployment of more than 250,000 Nvidia GPUs. Naver, a prominent player in internet services and a participant in the initiative via its subsidiary Naver Cloud, is set to enhance its AI capabilities by acquiring more than 60,000 Nvidia GPUs. Naver stock experienced an increase of approximately 5%. Hyundai experienced a 9.6% increase following Nvidia’s announcement of an expanded partnership with the automaker, focusing on autonomous vehicles, smart factories, and robotics, which includes the establishment of a new AI factory utilizing its latest Blackwell AI processors.

The two companies intend to implement 50,000 of Nvidia’s Blackwell GPUs and allocate approximately $3 billion towards AI infrastructure in South Korea. Australia’s benchmark index concluded the trading session unchanged at 8,881.9. Hong Kong’s Hang Seng Index experienced a decline of 1.43%, concluding at 25,906.65, whereas mainland China’s CSI 300 decreased by 1.47%, finishing at 4,640.67. In October, China’s manufacturing activity experienced a contraction that exceeded expectations, declining to its lowest level since May, according to an official survey released on Friday. This downturn coincided with a resurgence of trade tensions with Washington during the month. The official manufacturing purchasing managers’ index registered at 49, according to data from the National Bureau of Statistics, falling short of the anticipated 49.6.

A reading exceeding the 50 benchmark signifies expansion, whereas a reading below it implies a contraction. The nation’s manufacturing sector has continued to experience contraction since April, a period marked by the impact of U.S. President Donald Trump’s tariff initiatives on Chinese production and worldwide demand dynamics. In the U.S. overnight, all three major averages experienced declines as investors processed a series of earnings reports from major technology companies. The S&P 500 experienced a decline of 0.99%, concluding the day at 6,822.34, whereas the Nasdaq Composite fell by 1.57%, ending at 23,581.14. The Dow Jones Industrial Average experienced a decline of 109.88 points, equivalent to 0.23%, settling at 47,522.12.