Markets open September with AI-charged China, bruised Japan

Monday, 1st September 2025.

by inAfrika Reporter

Global markets kicked off September with a split screen: China’s equities riding an AI boom while Japan’s tech-heavy Nikkei slid as investors took profits after August’s run-up. CSI 300 gains of more than 10% in August set the tone, helped by expectations that Beijing will push domestic AI-chip substitutes and funnel liquidity into favoured sectors. Alibaba’s Hong Kong-listed shares surged nearly 19% in August on cloud optimism, while reports of Huawei’s progress on AI chips added fuel.

Across the Sea of Japan, the mood flipped. The Nikkei fell about 2% as traders rotated out of high-beta names; chip-testing giant Advantest sank roughly 9.1% and SoftBank Group dropped around 6%, symptomatic of a quick cool-down in the AI complex. Some desks also flagged U.S. trade policy uncertainty—specifically legal challenges to tariff regimes—as a macro overhang shaping risk appetite into the autumn.

Europe starts the week watching PMIs, unemployment prints, and a slate of remarks from ECB officials, including Christine Lagarde—data points that could refine the rate-cut glide path into Q4. In the U.S., traders are gauging whether summertime disinflation can coexist with firmer growth signals as the Fed edges toward a late-year easing debate. For EM investors, China’s AI-led rally is a reminder that policy-assisted themes can decouple from global jitters—until they don’t.

Near term, watch for: (1) any state-linked buying in mainland China that amplifies AI narratives; (2) sector rotation in Tokyo as brokers re-rack 2H targets; and (3) whether euro-area labour data gives doves or hawks the better headline. September is statistically a tough month for risk assets, but with yields still subdued and AI stories sticky, dip-buyers will be selective rather than absent.