Japan’s benchmark, the Nikkei 225 rose over 1.10%. The TOPIX index also rose, marking gains of just under 1%.
MSCI’s Asia Pacific stocks climbed 0.8%, led by South Korea’s Kospi, seen as a bellwether for AI investment, which jumped over 3%.
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Samsung Electronics and SK Hynix both advanced more than 4%, with investors viewing the South Korean chipmakers as key beneficiaries of the global AI growth. Hang Seng futures rose 0.3%.
The rally in Asia came even as US megacap earnings showed a mixed result overnight. Alphabet slipped over 3% in extended trading after lifting its capital spending plans for the year, while Tesla dropped 4% following second quarter earnings miss. IBM edged lower after cutting its full-year sales outlook. Still, US equity-index futures pared earlier losses.
Alphabet’s earnings are viewed as the first major test of the season, with investors set to scrutinise results over the coming two weeks for signs that the huge sums spent on AI are finally paying off. That scrutiny follows a selloff last week that dragged a chipmaker index into bear market territory.
Oil prices extended their advance after Iran-backed Houthi militants said they had targeted two Saudi Arabian tankers in the Red Sea, deepening the West Asia conflict and raising fears of further supply disruptions.
Global benchmark Brent rose 2% to around $96 a barrel, while West Texas Intermediate crude gained 1.4% to $88.07 a barrel. The escalation came as President Donald Trump warned he would strike Iranian bridges and power plants if Tehran kept attacking vessels in the Strait of Hormuz, prompting Iran to issue its own warning in response.
The jump in oil prices weighed on US Treasuries on Wednesday July 22, pushing the two-year yield up four basis points, while the 30-year yield held above 5% for its longest such stretch since the start of the financial crisis, reflecting investor unease over mounting government debt and persistent inflation.
Elevated energy prices have raised concerns that inflation could stay higher for longer, complicating the Federal Reserve’s policy path ahead of its meeting next week, where money markets are pricing roughly a 30% chance of a rate increase against a 70% probability of a hold.
In currency markets, the yen stayed in focus after sliding to its weakest level since 1986 earlier this week, trading little changed at 163.10 per dollar. The Bank of Japan, while expected to move rates roughly once every six months, is said to be open to an earlier hike if needed, given signs that inflation is becoming more evident. The offshore yuan was little changed at 6.7739 per dollar, and spot gold was little changed.
