TradingKey - Japanese and South Korean stocks surge following a shakeout! South Korea's KOSPI defies the trend to reclaim 6,800 points, while the Nikkei rebounds strongly from heavy losses; Kioxia jumps over 4%, and Samsung and SK Hynix both gain over 1%.

During the Asian trading session on August 31, Japanese and South Korean stock markets both opened lower with a gap down in early trading, weighed down by declining US stock futures and external risk-off sentiment. However, they gradually fluctuated higher during the session, with an accelerated surge late in the day, ultimately digesting most of the opening losses.

The KOSPI opened lower but moved higher to close up 0.46%, reclaiming the 6,800 mark again to settle at 6,820.02 points. Both major heavyweight stocks closed slightly higher, with Samsung Electronics rising 1.17% to 260,000 KRW; SK Hynix confirmed it is considering building a joint-venture memory chip plant in Japan, which supported its stock price, ultimately closing up 1.27% at 1,674,000 KRW.

KOSPI Index Chart, Source: TradingView

The Nikkei 225 Index opened down over 1%, breaching the 65,000 mark during intraday trading before narrowing its loss to 0.14% in the afternoon, supported by export stocks and bargain hunters, to close at 66,311.93 points. Meanwhile, two major heavyweights posted solid gains, with Kioxia rising 4.36% to close at 49,990 JPY and SoftBank gaining 0.76% to close at 5,200 JPY.

Following the Jackson Hole symposium, heightened expectations of a hawkish Federal Reserve, combined with pullbacks in US semiconductor and AI tech sectors, dampened risk appetite in early Asia-Pacific trading. This triggered concentrated net selling by foreign and institutional funds in the morning session, though markets later recovered lost ground amid support from retail investors and bottom-fishers. Additionally, short-term fluctuations in the yen provided support to export-oriented firms, while moderate Japanese domestic demand and housing starts data helped the Nikkei 225 Index erase most of its morning losses.

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