Asian Markets Surge as Kospi Soars, Nikkei Rallies on AI Chip Optimism Ahead of BOJ Decision

Asian share markets were up strongly on Friday as investors returned to technology and semiconductor stocks, buoyed by Microsoft and Amazon’s strong earnings buoying confidence in global spending on AI infrastructure.

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The rally spread to other major regional markets such as South Korea and Japan, and investors also awaited the Bank of Japan's (BOJ) monetary policy decision later in the day.

South Korea leads the rally

South Korea’s Kospi rebounded after three consecutive sessions of losses, up more than 16%.

Technology and semiconductor companies also benefited from strong optimism about the demand for AI-related products.

Among the biggest gainers:

• SK Hynix rose more than 25% and was on track to have one of its best trading sessions.
• Samsung Electronics rose more than 20%.
• Other technology companies such as LG Innotek and Seoul Semiconductor also made big gains.

The rally followed a sharp rise in the U.S. semiconductor index, which logged its biggest single-day gain in more than a year.

Japanese Tech Stocks Jump

Japan’s Nikkei 225 rose more than 6% as investors bought into leading semiconductor and AI-related companies.

Major gainers included:

Advantest: up nearly 18%

Tokyo Electron: up almost 9%. Disco, Lasertec, and Renesas Electronics: each climbed between 10% and 13%. SoftBank Group: climbed more than 9%, supported by its exposure to AI through chip designer Arm Holdings.

Such gains were in stark contrast to recent selling pressure because of concerns over the high AI valuation and increasing competition from Chinese memory-chip manufacturers.

AI Optimism Returns

The stock markets rebounded in Asian tech stocks on Wall Street on the strength of better-than-expected quarterly results from Microsoft and Amazon.

In a single day in the morning session, Microsoft added about $450 billion in market value based on its cloud and AI-based growth.

Amazon also soared more than 10% on the cloud performance, boosting investor confidence in continued AI infrastructure spending.

But Apple was in the opposite direction and fell more than 6% in after-hours trading, on the heels of a warning that supply constraints might impact future sales.

Investors are waiting for the BOJ policy decision

Apart from corporate earnings, investors are also keen to hear about the Bank of Japan (BOJ), which will also announce its decision on its latest monetary policy decision; it will be the central bank’s latest monetary policy decision on the 11th of September.

The central bank is expected to keep its benchmark interest rate at 1% following the rate hike last month.

Instead, attention will be focused on comments from BOJ Governor Kazuo Ueda on:

• The timing of any future interest-rate increases.
• Economic and inflation forecasts.
• Japanese yen outlook.

The policy statement will give us some clues on the direction of Japan's monetary policy for the rest of the year.