Asian stock markets moved higher on Wednesday as investors concentrated capital into names tied to artificial intelligence and awaited further policy signals from Washington and Tokyo. Memory chip makers in Korea led gains, while currency and bond markets reflected market participants' ongoing focus on rate prospects and inflation trends.
Equities and sectors
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 1% in early trading. Japan’s Nikkei reached a fresh record, trading up 1.1% at 57,956.92 in early trade after touching an intraday high of 58,047.89. The broader Topix edged up 0.07% to 3,818.73.
Korea’s KOSPI climbed nearly 1.7% and traded above the 6,000 mark for the first time. The index has gained 44% so far this year. A global shortage in memory chips has seen shares of Samsung Electronics and SK Hynix double since October, as cash has flowed up the AI supply chain to large, in-demand chipmakers.
In other regional markets, Hong Kong’s Hang Seng Index was up 0.36% while China’s CSI300 rose 0.3%. Australia’s S&P/ASX200 advanced as much as 1.1% to a record high despite data showing higher consumer prices in January, a development that increases concerns about the prospect of further interest-rate increases.
Corporate and AI developments
Investor sentiment toward the AI sector improved after Anthropic, a San Francisco-based startup, introduced 10 new ways for business customers to use its AI plugins. The announcement revived hopes that AI initiatives could boost profitability across a range of industries, after several weeks of choppy performance for AI-related stocks amid concerns that heavy capital spending might not produce near-term returns.
Leading global chipmaker Nvidia Corp is scheduled to report fourth-quarter results after the U.S. market close on Wednesday, an event that market participants will watch closely for further signals on demand in the sector.
Currencies, rates and central bank watchers
The yen strengthened 0.12% against the U.S. dollar to 155.7 per dollar on Wednesday, after it had fallen 0.8% on Tuesday. A news report said Japanese Prime Minister Sanae Takaichi had conveyed reservations about further interest-rate hikes to Bank of Japan Governor Kazuo Ueda, casting doubt over the timing of the next rate increase.
The dollar index, which tracks the greenback against a basket of currencies including the yen and the euro, fell 0.05% to 97.84. The euro was up 0.05% at $1.1777.
A Reuters poll released last week showed a majority of economists expect the Bank of Japan to raise its key rate to 1% by the end of June, with some predicting a move as soon as April amid rising inflation concerns and a weak yen. Traders are currently pricing in roughly 50% odds of a hike in April and a 65% chance of a hike by June.
NAB analysts commented on the uncertainty, saying: "Given there was an expectation that she would shift her stance on monetary policy this latest news brings uncertainty back into the market, and leaves investors keenly interested to see who her nominations are for the two new Bank of Japan board members which is expected to be announced today," highlighting investor attention on both nominations and the BOJ's possible path.
U.S. Treasury yields were slightly higher on the day, with the benchmark 10-year note yield up 0.5 basis points to 4.039% and the 30-year yield rising 0.4 basis points to 4.6933%.
Monetary policy and labour market commentary
Speeches on Tuesday by Federal Reserve governor Lisa Cook and Chicago Fed president Austan Goolsbee noted their view that the U.S. labour market could be beginning to stabilise. ANZ analysts summarized the stance of policymakers, saying: "It’s apparent that most members think it as appropriate to wait for further progress on inflation before adjusting policy lower." They added: "While there have been signs of labour market stabilisation in 2026, labour market conditions are soft and a source of disinflationary pressure."
ANZ nonetheless projects the Fed will begin easing in the second quarter, most likely in June, and forecast a total of 75 basis points of cuts over the course of the year.
Commodities
Energy and metals markets showed modest moves. U.S. crude oil rose 0.75% to $66.12 a barrel while Brent increased 0.75% to $71.30 a barrel. Precious metals were mixed, with spot gold essentially flat at $5,138.49 an ounce and spot silver down 0.43% to $86.96 an ounce.
Investor focus
Markets also awaited remarks from U.S. President Donald Trump in his State of the Union address on Tuesday evening in Washington, with participants expecting the speech could cover topics ranging from trade and affordability to foreign policy toward Iran. That address, alongside corporate earnings and central bank developments, will likely continue to influence near-term market flows.
Views on AI spending
Market commentary has acknowledged the uneven prospects for AI-related investments. Nuveen’s head of macro credit and global investment strategist Laura Cooper warned that, "AI is not a bubble technology, but that doesn’t mean every AI bet will pay off. There are companies spending significantly on AI that likely won’t see a return," underscoring the differing outcomes companies may face despite sector-wide enthusiasm.
Investors will be watching earnings and policy signals closely to gauge which AI investments are translating into sustainable revenue growth and which may fall short of expectations.
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