Asian Stocks Rise on Korean Rally, Yen Holds Gains: Markets Wrap

(Bloomberg) — Asian stocks rose after a rally in chip shares revived confidence in the artificial intelligence trade. The yen held onto its gains after authorities stepped in once again to try and prop up the nation’s sagging currency.

South Korea’s Kospi Index — a bellwether for AI investments — soared over 14%, rebounding from a three-day selloff, with chip majors SK Hynix Inc. and Samsung Electronics Co. surging. With shares in Japan also gaining, the regional MSCI Asia Pacific gauge climbed for a second day.

Advances in Asia came after an index of chip stocks on Wall Street posted its biggest advance in more than a year. Tech remained in focus with Apple Inc. dropping over 6% in extended trading as supply shortages hurt its sales forecast, while Amazon.com Inc. surged 9% after cloud-computing revenue accelerated for a fifth straight quarter. Earlier, Microsoft Corp. surged 16%, adding roughly $450 billion to its value, the most by any stock in a single day.

In Asia, attention is on the Bank of Japan after the yen posted its biggest gain against the dollar in more than two years in the previous session, following another round of intervention by authorities. The central bank announces its policy decision Friday. The currency traded at 160.36 per dollar, having strengthened to as much as 157.98 on Thursday.

Thursday’s rally on Wall Street offered a reprieve for technology stocks after the Nasdaq 100 Index logged six straight sessions of losses on concern that the billions of dollars being poured into AI may not generate commensurate returns. With the Federal Reserve standing pat and bond yields climbing, traders are also assessing the strength of the US economy and whether the recent decline in oil prices will help ease inflation.

“Despite near-term volatility, the outlook for US equities remains constructive, supported by strong corporate earnings, ongoing AI adoption, a resilient economy, and favorable financial conditions,” said Sameer Samana at Wells Fargo Investment Institute.

Elsewhere, the dollar held its declines from the Fed holding interest rates unchanged and as the yen surged abruptly. In the Treasuries market, long-term yields touched fresh multiyear highs, extending the surge unleashed by the Fed decision to hold rates steady despite still-elevated inflation.

Read: BOJ to Stand Pat With Ueda Back in Spotlight: Decision-Day Guide

Oil edged higher in early Friday trading, with West Texas Intermediate crude around $84 a barrel. Traders have hesitated to make big bets as they weighed US and Iran exchanging air strikes Thursday against a recent pick-up in shipping through Hormuz.

Meanwhile, solid US consumer spending and business investment signaled underlying strength even as growth moderated in the second quarter.

With the Bank of England also holding on Thursday, attention now will be on the Bank of Japan.

The BOJ is expected to keep rates unchanged Friday, shifting investors’ attention to whether Governor Kazuo Ueda signals that the next rate increase could come sooner than many economists currently anticipate.

All 52 economists surveyed by Bloomberg forecast the BOJ will hold its benchmark rate steady at the end of a two-day gathering as it assesses the impact of last month’s increase to 1%, the highest in 31 years. That will put the spotlight on updated economic forecasts and Ueda’s press conference in the afternoon and any comments on the currency.

“There is a risk of one or two of the BOJ board voting for back-to-back rate hikes, but we think a turn in USD/JPY really requires the dollar to top out first,” said Chris Turner, head of currency strategy at ING Groep NV.

Corporate Highlights:

Meta Platforms Inc. said it has already committed almost $700 billion in future spending, through long- and short-term agreements, related to AI data centers, cloud computing and more. Oracle Corp. said it would expand a partnership with Google Cloud to bring Gemini AI tools to its business customers. Qualcomm Inc. Chief Executive Officer Cristiano Amon said demand for smartphones remains strong, but the growing costs of making the devices are keeping the market down. Anthropic PBC announced that its AI models had breached three different organizations during cybersecurity tests that went awry, a little more than a week after its chief rival, OpenAI, disclosed a similar incident. Some of the main moves in markets:

Stocks

S&P 500 futures rose 0.2% as of 9:04 a.m. Tokyo time Hang Seng futures rose 0.5% Japan’s Topix was little changed Australia’s S&P/ASX 200 rose 0.9% Euro Stoxx 50 futures rose 1.4% Currencies

The Bloomberg Dollar Spot Index rose 0.1% The euro was little changed at $1.1524 The Japanese yen fell 0.4% to 160.23 per dollar The offshore yuan was little changed at 6.7483 per dollar The Australian dollar was unchanged at $0.7027 Cryptocurrencies

Bitcoin rose 0.1% to $64,808.2 Ether was little changed at $1,919.8 Bonds

The yield on 10-year Treasuries was little changed at 4.67% Japan’s 10-year yield was unchanged at 2.800% Australia’s 10-year yield declined four basis points to 4.95% Commodities

West Texas Intermediate crude rose 0.5% to $84.03 a barrel Spot gold was little changed This story was produced with the assistance of Bloomberg Automation.

–With assistance from Ruth Carson.

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