Asian Stocks Climb, Japan Nears Record Highs on Trade Optimism and Tech Strength
Most Asian markets advanced on Thursday, with Japanese stocks approaching record levels amid continued optimism over a U.S.-Japan trade deal. The rally was further supported by strong tech earnings, especially from Alphabet Inc. (NASDAQ:GOOGL), and upbeat sentiment around artificial intelligence.
Gains in the tech sector were reinforced by SK Hynix Inc. (KS:000660), a major Nvidia supplier, which reported robust second-quarter earnings and forecast strong AI-driven demand, lifting the broader chip sector in Asia.
Regional markets took their lead from Wall Street’s overnight record highs, fueled by investor enthusiasm for the U.S.-Japan trade agreement and hopes that more deals may follow ahead of President Donald Trump’s August 1 tariff deadline.
In addition to Alphabet’s earnings, sentiment was further boosted by Trump’s announcement of new AI-friendly policies, which helped offset weakness in Tesla (NASDAQ:TSLA) shares after a disappointing second-quarter report.
In Asian futures trading, S&P 500 Futures rose 0.2%, while Nasdaq 100 Futures gained 0.4%.
Japan Leads Regional Gains; TOPIX Hits Record High
Japanese stocks led regional advances after Tokyo finalized a trade agreement with Washington. The Nikkei 225 climbed 1.9%, approaching its July 2024 peak, while the TOPIX index jumped 1.9% to an all-time high of 2,982.14.
Under the new deal, Japan will face a 15% U.S. tariff on exports—less than the previously threatened 25%—with automobiles also subject to the same reduced rate. While the tariff still poses a challenge, the agreement alleviated investor concerns over the potential economic fallout.
The upbeat sentiment helped markets look past weak July manufacturing data, which showed an unexpected contraction. However, a pickup in services activity offered a partial offset.
AI and Earnings Drive Tech-Led Rally Across Asia
Technology stocks powered gains across Asia, fueled by AI optimism and solid quarterly results from key players.
- South Korea’s KOSPI index rose 0.9%, supported by a nearly 2% gain in SK Hynix, which posted record profits and projected continued strength in AI-related demand.
- Rival Samsung Electronics (KS:005930) also ticked up modestly.
- Hong Kong’s Hang Seng added 0.5%, lifted by tech, though EV sector volatility capped further upside.
- China’s CSI 300 and Shanghai Composite each gained 0.3%, while Singapore’s Straits Times index rose 0.5%.
Investors reacted positively to Alphabet’s stronger-than-expected Q2 results, along with news that the company is ramping up capital spending for AI and cloud infrastructure.
Trump’s AI summit further boosted sentiment, with the president announcing three executive orders to support the U.S. AI sector, including increased exports of AI technology.
Other Markets Mixed
Elsewhere:
- Australia’s ASX 200 edged 0.1% lower on profit-taking, following a recent rally to record highs.
- India’s Gift Nifty 50 Futures traded flat, though sentiment remained supported by strong corporate earnings. Infosys Ltd (NSE:INFY) was expected to gain after delivering solid June quarter results.
