Asian stock markets gained momentum as President Donald Trump’s renewed push to accelerate investment in artificial intelligence (AI) lifted the outlook for the region’s technology sector. Tokyo stocks led the way, with SoftBank Group Corp., OpenAI LLC, and Oracle Corp. playing pivotal roles in the newly announced AI investment drive. South Korean and Australian benchmarks also saw gains of around 0.5%, while U.S. equity futures rose following a solid performance from the S&P 500, which closed up 0.9%.
The rally in Asian technology stocks is expected to continue, bolstered by the ongoing AI developments, according to Vicki Chi, a money manager for Asian equities at Robeco. Speaking on Bloomberg TV, Chi noted that the Asian technology supply chain has performed strongly, and the renewed focus on AI will only enhance its prospects. “We’re already seeing AI boosting productivity in the corporate sector, and this year, consumers will start to feel its impact as well,” she said.
While the broader market sentiment has been bolstered by expectations of deregulation under the new U.S. administration, investors remain concerned about Trump’s stance on Chinese tariffs. After sparing China from his early executive orders, Trump raised concerns once again by hinting at a potential 10% tariff on Chinese goods, targeting the country over its role in the fentanyl trade.
Despite these risks, Mohit Kumar of Jefferies International emphasized that deregulation and the possibility of less severe tariffs could benefit risky assets. “The market is recalibrating its expectations, and it seems tariffs may not be as damaging as initially feared,” Kumar said. He also pointed to the potential for lower oil prices as another positive factor for the global economy.
In bond markets, U.S. ten-year Treasury yields inched up by two basis points after a slight dip in the previous session. The dollar, as measured by a Bloomberg index, fell by less than 0.1%.
At the annual World Economic Forum in Davos, China’s Vice Premier Ding Xuexiang announced plans to expand imports in an effort to promote balanced trade. Meanwhile, President Xi Jinping emphasized the strengthening of ties with Russia, highlighting deeper cooperation amid global uncertainties.
In Japan, the Bank of Japan is reportedly moving toward an interest rate hike at its upcoming policy meeting, fueling speculation of a 25 basis point increase. This news helped lift the yen slightly against the dollar.
SoftBank Group’s stock soared nearly 9% after Trump singled out the company as a key participant in the “Stargate” AI joint venture, pushing its shares to their highest level since July. The AI initiative is seen as a major growth driver for the Japanese conglomerate, which has been focusing heavily on tech investments.
In New Zealand, inflation remained unexpectedly steady in the final quarter of the previous year, holding above the central bank’s target range. The data contributed to a mixed regional economic outlook.
In the U.S., Netflix Inc. posted its largest-ever quarterly subscriber gain, fueled by the success of its first major live sporting events and the return of the hit series Squid Game. This news further boosted investor sentiment in tech stocks.
Additionally, an exchange-traded fund (ETF) tracking AI-related companies hit a three-year high, underscoring the growing investor interest in the sector. Small-cap stocks also saw an uptick, with investors betting that these companies would benefit from a more protectionist economic policy under Trump.
According to Craig Johnson of Piper Sandler, the rally in equity markets last week was driven by a combination of cooler inflation data, strong earnings from banks, and a recovery from oversold conditions. “We expect further upside in equities, supported by the return of Trump’s ‘business and investor-friendly’ policies,” Johnson said.
As Asian markets respond to global shifts in trade and technology investment, it is clear that the region’s tech sector remains at the center of investor focus, with AI developments and geopolitical dynamics shaping market movements across the continent.
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