Asian equities opened the trading week with robust gains, propelled by a powerful rebound in artificial intelligence stocks that originated on Wall Street. This surge created a ripple effect across Pacific markets, with Japan’s Nikkei 225 index leading the charge with a substantial 1.9% advance to 50,455.07 points.
The semiconductor sector emerged as the primary catalyst for this upward momentum. Tokyo Electron, a major chip manufacturing equipment producer, witnessed an impressive 6.7% climb, while Advantest, specializing in chip testing technology, recorded a 4.7% gain. This performance mirrored the recovery pattern established by U.S. tech giants, particularly Nvidia, which had surged 3.9% in the previous trading session.
In a significant monetary policy development, the Bank of Japan’s decision to elevate its key interest rate to a three-decade high produced unexpected currency effects. Contrary to conventional economic theory, the yen weakened substantially against the dollar, trading at 157.32 yen per dollar. This depreciation prompted intervention warnings from Japan’s top foreign exchange official, Atsushi Mimura, who indicated readiness to address excessive currency fluctuations.
Chinese markets demonstrated moderate positivity, with the Shanghai Composite advancing 0.7% to 3,915.84 and Hong Kong’s Hang Seng index rising 0.2% to 25,751.93. The People’s Bank of China maintained stability by keeping its benchmark loan prime rates unchanged.
Regional performances varied, with South Korea’s Kospi gaining 1.8%, Taiwan’s Taiex rising 1.6% (boosted by TSMC’s 2.1% increase), and Australia’s S&P/ASX 200 climbing 0.9%. Market analysts attributed this constructive bias to the combination of Wall Street’s solid rebound and persistent bullish sentiment regarding year-end market trajectories.
Meanwhile, underlying economic concerns persisted beneath the market optimism. The University of Michigan’s consumer sentiment survey revealed only marginal improvement from November levels, remaining significantly below year-ago readings. Persistent inflation pressures, a cooling job market, and weakening retail sales continue to challenge economic momentum, compounded by ongoing trade tensions between the United States and key international partners.