Asian stocks extend gains on tech rally, yen strengthens

Asian stocks rose on Friday (July 10) as investors returned to semiconductor stocks amid renewed optimism over artificial intelligence-driven demand, while the yen strengthened.

The MSCI Asia Pacific Index climbed 1.3%, driven by a 4.6% rally in South Korea's Kospi. However, the regional benchmark remains on track for a weekly loss.

Key Market Moves

• SK Hynix rose 2.5% in Seoul after raising US$26.5 billion in its American Depositary Receipts (ADR) share offering.
• S&P 500 futures were little changed as of 10:53 am Tokyo time.
• Japan's Topix rose 0.9%.
• Australia's S&P/ASX 200 rose 0.4%.
• Hong Kong's Hang Seng rose 0.8%.
• Shanghai Composite rose 0.5%.
• Nasdaq 100 futures slipped 0.1%, signaling a more cautious tone.

Currency and Bond Markets

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% to trade around 161.80 per US dollar.

The yield on the benchmark 10-year US Treasuries fell two basis points to 4.53%.

Commodities

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

Tech and AI Investment Outlook

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

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

"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."

Key Developments in Chip Sector Spending

• Micron Technology announced plans to increase spending on new plants in the US to US$250 billion to meet demand fueled by the AI boom.
• SK Hynix's ADR sale is expected to help fund growing spending plans amid soaring demand for AI computing equipment.
• SK Hynix and Samsung Electronics are poised to ramp up investment in South Korea as part of a government-led initiative worth US$880 billion.
• SK Hynix's ADRs are set to begin trading Friday on the Nasdaq Global Select Market under the symbol SKHYV, which will change to SKHY when regular trading begins on July 13.

Analyst Perspectives

Jeff Buchbinder at LPL Financial noted that AI is likely to remain a key driver of markets during the second half of 2026, but the narrative is evolving. He advised investors to focus less on who is spending the most and more on who is generating measurable returns from those investments.

Meanwhile, Elias Haddad at Brown Brothers Harriman commented that despite 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.

Source: Bloomberg