Asian stocks extend gains on tech, yen strengthens

ASIAN stocks gained on Friday (Jul 10) as investors piled back into semiconductor stocks on renewed optimism over artificial intelligence-driven demand and the yen strengthened.

The MSCI Asia Pacific Index climbed 1.3 per cent, led by a 4.6 per cent rally in South Korea’s Kospi, though the regional benchmark remained on track for a weekly loss.

SK Hynix rose 2.5 per cent in Seoul after raising US$26.5 billion in its American Depositary Receipts share offering. Futures for the tech-heavy Nasdaq 100 Index slipped 0.1 per cent, signalling a more cautious tone.

Among the major market moves, the S&P 500 futures were little changed as of 10.53 am Tokyo time. Meanwhile, Japan’s Topix rose 0.9 per cent, Australia’s S&P/ASX 200 rose 0.4 per cent, Hong Kong’s Hang Seng rose 0.8 per cent and the Shanghai Composite rose 0.5 per cent.

Japan’s long-term bond yields fell and the yen strengthened after Finance Minister Satsuki Katayama said the government wants to encourage pension funds to increase investment in domestic financial assets. The yen gained 0.4 per cent to trade around 161.80 per US dollar.

Elsewhere, Brent crude traded around US$76 a barrel, holding Thursday’s decline as traders judged the US-Iran conflict as being unlikely to escalate into a broader disruption to energy supplies.

That helped bonds extend their gains, with the yield on the benchmark 10-year Treasuries falling two basis points to 4.53 per cent.

Optimism toward technology shares resurfaced as investors focused on signs that the AI investment boom remains intact after a sharp bout of selling in chip stocks earlier this week.

Amid ongoing debate about inflation, interest rates and geopolitics, the market’s direction over the next month may come down to earnings, according to Anthony Saglimbene, a strategist at Ameriprise.

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“Companies will need to do more than just beat estimates,” he said.

“They will need to show that margins are holding at high levels, that guidance remains firm and probably even better than analysts currently project, and that tech-led profit growth still has enough breadth to support the market’s valuation.”

Spending by chip companies is at the centre of that debate. In the latest capital expenditure announcement, Micron Technology said it plans to increase spending on new plants in the US to US$250 billion to help meet demand fuelled by the AI boom.

SK Hynix’s ADR sale is expected to help fund growing spending plans amid soaring demand for equipment used in AI computing.

The company and Samsung Electronics are poised to ramp up investment in South Korea as part of a government-led initiative worth US$880 billion.

The ADRs are set to begin trading Friday on the Nasdaq Global Select Market under the symbol SKHYV, which will change to SKHY when they begin regular trading Jul 13.

AI is likely to remain a key driver of markets during the second half of 2026, but the narrative is evolving, and this transition may create a more selective environment, according to Jeff Buchbinder at LPL Financial.

Investors should focus less on who is spending the most and more on who is generating measurable returns from those investments, he said.

Meanwhile, with the US and Iran exchanging airstrikes, the market treated the attacks as another round of managed escalation based on the premise that the economy can absorb the shock, said Elias Haddad at Brown Brothers Harriman. BLOOMBERG