Asian stocks rise as US inflation, tech spur gains; Kospi up 1%

ASIAN stocks on Friday (Aug 14) climbed as further evidence of moderating US inflation reinforced bets that the US Federal Reserve will refrain from raising interest rates next month, while technology stocks rallied.

MSCI’s Asia-Pacific equities gauge rose 0.5 per cent, putting the benchmark on course for a fourth consecutive weekly advance – its longest winning streak since May.

South Korea’s Kospi Index, a bellwether for the artificial intelligence trade, led the region with a 1 per cent gain. Samsung Electronics and SK Hynix took their advances for the week to around 15 per cent.

Among the main moves across markets, S&P 500 futures were little changed as at 10 am Tokyo time. Hang Seng futures fell 0.6 per cent, Japan’s Topix rose 0.9 per cent and Australia’s S&P/ASX 200 fell 0.8 per cent.

The Asian moves came as investors redoubled their bets on the AI trade after July’s sell-off, sending MSCI’s All Country World Index to a record high.

On Thursday, the S&P 500 rose 0.7 per cent to an all-time high, while the Nasdaq 100 climbed more than 1 per cent to its highest level since late June.

Elsewhere, Treasuries held Thursday’s advance after US wholesale inflation cooled in July.

The yield on the rate-sensitive two-year note was little changed at 4.15 per cent, after falling six basis points in the prior session. Money markets now price in less than a 40 per cent chance of a Fed rate increase in September.

Back-to-back benign inflation prints, following last week’s softer-than-expected jobs report and a pullback in oil prices, are easing pressure on the Fed to tighten policy at its meeting in September.

SEE ALSO

European shares subdued ahead of euro zone inflation data; focus on Middle East

US stocks: S&P 500 notches record-high close as rate-hike worries ease

While the lack of a deal in the Middle East remains a concern, equity traders are also focusing on a revival in the AI trade after a sell-off in semiconductor stocks in July.

“The next round of data that we get in September and the lead up to the meeting will be pretty critical,” said Bank of America securities economist Stephen Juneau.

At the same time, “the market obviously has started to really discount hikes more and more given that the data in recent months has been more dovish”.

US wholesale inflation decelerated by more than forecast in July. The producer price index rose 4.7 per cent from a year earlier, down from a 5.5 per cent annual increase in June, and was unchanged from the previous month.

In other corners of the market, Brent was little changed around US$87.10 a barrel early on Friday after dropping more than 2 per cent in the previous session, snapping a six-day rally. Gold was a touch lower at about US$4,330 an ounce.

A Bloomberg gauge of Asian chip-related stocks rallied over 1 per cent, a fifth consecutive day of gains. 

“A huge amount of hyperscaler money is flowing into hardware,” said Hitoshi Asaoka, chief strategist at Asset Management One.

“That is translating into extremely strong sales and profit growth for hardware companies. Investors are returning to the idea of, ‘let’s look at the earnings themselves again’.”

Even as Treasuries rallied on Thursday, the US sold 30-year bonds at the highest yield in a quarter century, underscoring the premium investors are demanding to finance the nation’s deficits.

Long-term yields have surged above 5 per cent in 2026 as higher energy prices fuelled concern that inflation would remain elevated and force the Fed to keep rates higher for longer.

Those pressures have been compounded by heavy Treasury issuance after years of fiscal deficits and a wave of corporate borrowing to finance the AI boom.

Meanwhile, Fed officials remain divided over the path for rates. 

Richmond Fed president Tom Barkin argued for holding steady as inflation eases, while Cleveland Fed president Beth Hammack reiterated her preference for a hike. 

Elsewhere, the Trump administration is applying a 100 per cent tariff on imports of unmanned aircraft systems and their components in a bid to cut the US’ reliance on foreign supplies of drones. 

In Asia, the yen remained within striking distance of a key level against the dollar, even after Prime Minister Sanae Takaichi’s government was said to support an interest rate increase.

The Japanese currency was slightly stronger early on Friday, trading near 159.35 per US dollar.

The Bank of Japan is likely to raise rates in either September or October, according to people familiar with the matter.

Concerns at the central bank that yen weakness will fuel inflation are converging with the government’s desire to reinforce the impact of recent US-Japan currency intervention, strengthening the case for a near-term hike, the people said. BLOOMBERG