SYDNEY, Feb 18 - Asian equity markets posted gains on Wednesday, with Tokyo among the leaders, despite persistent investor unease over the outlook for artificial intelligence and its wider economic implications.
Japan’s benchmark Nikkei 225 climbed 0.93% to 57,090.14, putting the index on track to end a three-day losing streak. Australia’s S&P/ASX200 added 0.5%.
Several regional markets were not trading owing to Lunar New Year holidays - mainland China, Hong Kong, Singapore, Taiwan and South Korea remained closed - narrowing the early-session breadth in Asia.
The positive start in the region followed a lacklustre session on Wall Street on Tuesday, where investor attention remained focused on the potential scale and trajectory of the AI boom. Concerns that companies may be over-investing in AI and about how the technology could reshape labor markets have underpinned recent market volatility.
In U.S. trading overnight, the Dow Jones Industrial Average rose 0.07% to 49,533.19, the S&P 500 gained 0.10% to 6,843.22 and the Nasdaq Composite increased 0.14% to 22,578.38. The S&P 500 initially fell 0.88% before recovering to close slightly positive.
Benchmark U.S. Treasury yields were largely steady in Asian hours: the 10-year note yield was flat at 4.054% on Wednesday, while the 30-year bond yield dipped 0.4 basis points to 4.6788%.
Market strategists highlighted how uncertainty around AI investment and its economic effects is feeding volatility. "AI uncertainty remains a source of volatility, both in terms of the difficulty in assessing which AI companies will be the winners and losers but also what sort of impact will AI have in other companies and sectors of the economy," NAB analysts said.
Oil markets were under pressure after comments from Iran’s foreign minister following talks in Geneva. Brent crude and West Texas Intermediate were little changed at $67.42 and $62.32 per barrel, respectively, after both fell to more than two-week lows in the previous session. Tehran said it and Washington had reached an understanding on main "guiding principles" aimed at resolving their long-standing nuclear dispute, easing concerns about the prospect of military conflict near the Strait of Hormuz that could have disrupted global oil flows.
Precious metals retreated as risk perceptions shifted. Gold fell about 0.2% to near $4,867 per ounce and silver declined by roughly the same margin to around $73.30 per ounce. ANZ analysts commented: "Gold prices dipped as a stronger U.S. dollar weighed on the market, with declining U.S. Treasury yields providing little support. Investors remained uncertain amid subdued trading in Asia. Prospects of easing geopolitical tension with positive outcomes from the Iran-US talks in Geneva weighed on haven demand for gold."
The U.S. dollar index, which tracks the greenback against a basket of major currencies, was steady in Asian trade at 97.12. The currency has retained ground amid elevated geopolitical risks and as market participants awaited the Federal Reserve’s January meeting minutes, due later on Wednesday, for further clarity on the likely path for interest rates.
Major currency moves included the euro edging down 0.1% to $1.1844 and sterling holding at $1.3563 after a 0.5% slide in the previous session. The New Zealand dollar weakened 0.6% to $0.6014 after the country’s central bank indicated monetary policy would need to remain accommodative for some time to support the economic recovery. The Australian dollar eased 0.2% to $0.7075. The yen firmed modestly, improving 0.1% to 153.12 per dollar.
In fiscal-market news, Japan’s annual bond issuance is expected to jump by about 28% three years from now as borrowing needs rise, according to a finance ministry estimate cited in reporting. The estimate indicated Japan may need to issue up to 38 trillion yen in the fiscal year starting April 2029 to cover a gap created by expenditures that exceed tax receipts, up from 29.6 trillion yen in fiscal 2026.
Market implications
The session underscored how global equity performance remains sensitive to technological disruption risks tied to AI, to geopolitical developments that affect commodity markets, and to central bank guidance that shapes currency and bond markets.