Record Korean Rally Lifts Stocks, Yen Pares Gains: Markets Wrap

(Bloomberg) — South Korean stocks posted a record intraday gain, boosting Asian shares as investors renewed bets on the artificial intelligence trade after this week’s rout. The yen weakened, giving back some of Thursday’s intervention-driven gains.

The Kospi Index — a bellwether for AI investments — surged an intraday record of 17%, rebounding from a three-day selloff, Chip majors SK Hynix Inc. and Samsung Electronics Co. both soared at least 20%. Japan’s Nikkei 225 Stock Average rose more than 5%, sending the regional MSCI Asia Pacific gauge up by almost 4%.

The advances in Asia came after an index of chip stocks on Wall Street posted its biggest gain in more than a year. Amazon.com Inc. rose 9.5% after cloud-computing revenue accelerated for a fifth straight quarter, while Microsoft Corp. surged 16% after earnings, adding roughly $450 billion to its value, the most by any stock in a single day. Apple Inc. dropped more than 6% in extended trading as supply shortages hurt its sales forecast.

“Today’s surge reflects investors temporarily switching off the alarm around technology stocks,” said Hebe Chen, a senior market analyst at Vantage Global Prime. “The earnings have given investors fresh reason to believe the AI demand engine is still running, unleashing bargain hunting and short covering across the names hit hardest.”

In Asia, attention is on the Bank of Japan after the yen posted its biggest gain against the dollar in more than two years on Thursday, following another round of intervention by authorities. The central bank announces its policy decision Friday. The currency weakened 0.7% to 160.57 per dollar, after surging more than 3% to 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 a 23% jump in oil prices this month will weigh on 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.

In the US, large gains occurred in shares that, as of the first quarter, had been top holdings of Situational Awareness, the hedge fund led by former OpenAI researcher Leopold Aschenbrenner that earlier sold a big chunk of its holdings to Citadel after liquidating equities caught up in the AI rout.

Elsewhere, a Bloomberg gauge of the dollar rose, snapping a five-day run of losses.

Treasuries were a touch stronger after long-term yields touched multiyear highs earlier this week, extending the surge unleashed by the Fed decision to hold rates steady despite still-elevated inflation. The yield on the Treasury 30-year bond slipped two basis points to 5.20%.

Gold traded around $4,100 an ounce. Oil fell, with Brent crude dropping 1%. The global benchmark is still up by about a fifth this month.

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:

Tesla executives have been told to prepare for a separation of the China business ahead of a potential merger, a person familiar with those talks said, the Wall Street Journal reported. 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. China’s DeepSeek is planning a massive artificial-intelligence data center in Inner Mongolia, according to people familiar with the matter. Some of the main moves in markets:

Stocks

S&P 500 futures rose 0.3% as of 10:42 a.m. Tokyo time Nikkei 225 futures (OSE) rose 5.7% Japan’s Topix rose 2.2% Australia’s S&P/ASX 200 rose 0.4% Hong Kong’s Hang Seng fell 0.9% The Shanghai Composite rose 0.8% Euro Stoxx 50 futures rose 0.6% Currencies

The Bloomberg Dollar Spot Index rose 0.2% The euro fell 0.1% to $1.1515 The Japanese yen fell 0.7% to 160.58 per dollar The offshore yuan was little changed at 6.7501 per dollar Cryptocurrencies

Bitcoin rose 0.2% to $64,847.75 Ether was little changed at $1,919.73 Bonds

The yield on 10-year Treasuries declined two basis points to 4.65% Japan’s 10-year yield was unchanged at 2.800% Australia’s 10-year yield declined five basis points to 4.95% Commodities

West Texas Intermediate crude fell 1.4% to $82.45 a barrel Spot gold fell 0.4% to $4,086.96 an ounce This story was produced with the assistance of Bloomberg Automation.

–With assistance from Ruth Carson, Winnie Hsu and Toby Alder.

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