Japan Shares Slip 0.23% as Powell Signals High Valuations

Japan’s benchmark Nikkei 225 closed 0.23% lower at 45,630.31, marking the first decline in the index after a brief uptick earlier in the session. The dip came as U.S. Federal Reserve Chair Jerome Powell cautioned that equity prices are "fairly highly valued" and hinted that the path to rate cuts remains uncertain.

In the wider Asia‑Pacific region, markets were mixed. Australia’s ASX/S&P 200 fell 0.92% to 8,764.5, while South Korea’s Kospi slipped 0.4% to 3,472.14 and the small‑cap Kosdaq dropped 1.29% to 860.94. Despite the broader weakness, South Korean defence names such as Hanwha Aerospace, Korea Aerospace, and Hyundai Rotem rallied 2%–5% as the country continues to supply military equipment to NATO.

Hong Kong’s Hang Seng Index gained 1.49% to finish at 4,566.07, and mainland China’s CSI 300 closed higher at 4,566.07. The gains came amid the approach of Super Typhoon Ragasa, which has brought hurricane‑force winds and heavy showers to southern Hong Kong.

Shares of Alibaba surged more than 6% after CEO Eddie Wu announced a ¥380 billion ($53 billion) investment in artificial‑intelligence infrastructure and unveiled its new AI language model, Qwen3‑Max, at the company’s annual Apsara Conference in Hangzhou.

In New Zealand, the Reserve Bank named Anna Breman as the first female governor, who will begin her five‑year term on December 1. Christian Hawkesby will remain as acting governor until October.

Australia’s August consumer‑price index rose 3% year‑on‑year, surpassing economists’ 2.9% forecast.

Across the United States, the three major averages finished lower. The S&P 500 fell 0.55% to 6,656.92 after earlier reaching an intraday high, while the Nasdaq Composite slipped nearly 1% to 22,573.47, led by declines in AI‑heavy names such as Nvidia, Oracle and Amazon. The Dow Jones Industrial Average dropped 0.19% to 46,292.78.

The day’s moves reflected a cautious sentiment amid Powell’s remarks and the uncertainty surrounding future monetary policy.