Most Asian stocks fell on Friday, with pharmaceutical stocks leading the decline after US President Donald Trump imposed high import tariffs on the sector, while declines in technology stocks also weighed.

Japanese stocks were the exception, rising modestly as soft consumer inflation data fueled speculation that the Bank of Japan will not raise interest rates soon.

Regional markets followed overnight losses on Wall Street, which fell for a third straight session amid growing uncertainty over US interest rates and inflation. S&P 500 futures were unchanged in Asian trading, with focus on upcoming data from the Purchasing Consumer Price Index (PCE), the Federal Reserve's preferred measure of inflation.

Asian stocks suffered losses in the pharmaceutical sector after Trump announced a 100% tariff.

South Korea's KOSPI was the worst performer in Asia, falling 2.1%, while Hong Kong's Hang Seng Index fell 0.8%. China's Shanghai Shenzhen CSI 300 and Shanghai Composite indices fell between 0.3% and 0.5%.

Trump announced a series of trade tariffs on Thursday evening, the most notable of which was a 100% levy on all branded and patented pharmaceutical products. The duty will take effect on October 1.

This move foreshadows significant pressure on Asian pharmaceutical exporters, as most regional companies have significant exposure to US markets.

However, Trump stated that companies building manufacturing facilities in the US will be exempt from the tariff. Among individual companies, South Korea's Samsung Biologics Co Ltd and Hong Kong-listed WuXi Biologics fell 1.7-4%. Japan's Daiichi Sankyo Co., Ltd. fell 1.9%.

Asia's Tech Sector Falls Following U.S. Losses Amid AI Doubts

Losses in tech stocks, which fell along with their U.S. peers, also weighed on Asian markets. Artificial intelligence-related stocks suffered the most amid growing questions about a potential bubble in the sector.

NVIDIA Corporation's $100 billion investment in OpenAI has raised concerns about increasing cyclical investing in the sector, which in turn has led investors to take recent profits in tech stocks. South Korean chipmakers SK Hynix Inc and Samsung Electronics Co Ltd fell 3-5%, while Nvidia supplier TSMC fell nearly 2% in Taiwan trading.

Chinese and Hong Kong tech giants like Xiaomi Corp, Alibaba, and Tencent retreated after strong gains earlier this week. Xiaomi fell 5% despite Goldman Sachs raising its price target on the company's shares amid optimism about its upcoming fall event.

Japanese stocks rise as soft Tokyo CPI fuels bets on Bank of Japan stance

Japan's Nikkei 225 and TOPIX indices rose 0.1% and 0.6%, respectively, though more significant gains were capped by losses in the technology and pharmaceutical sectors.

Tokyo's consumer price index (CPI) data came in below expectations for September, while core inflation also eased from recent peaks.

This measure typically serves as a benchmark for overall inflation and has fueled bets that cooling inflation will undermine the Bank of Japan's plans to further raise interest rates. This view also weighed on the yen, benefiting export-oriented stocks.

Japanese stock indices remained near recent record highs amid growing confidence that the Bank of Japan will maintain a largely accommodative monetary policy stance in the coming months.

Broader Asian stocks were largely unchanged. Australia's ASX 200 rose 0.1%, while Singapore's Straits Times Index added 0.3%.

Indian Nifty 50 index futures rose 0.1%, indicating a positive opening after the index posted sustained losses this week. Indian pharmaceutical stocks are also expected to fall due to their significant exposure to the US.