Asian stocks moved higher on Friday as Japanese shares rallied following the Bank of Japan’s latest rate hike.
Lower oil prices also helped ease inflation concerns, while a technology-led rebound on Wall Street supported broader market sentiment.
Japan’s Nikkei 225 rose 1.7% to 65,228, while the TOPIX gained 0.2% to 4,102.51.
Meanwhile, the MSCI Asia Pacific index advanced around 0.5%.
Nikkei Rallies After BOJ Rate Hike
The Bank of Japan raised its policy rate by 25 basis points to 1.25%.
The decision was approved in a 7-2 vote, with two policymakers supporting unchanged rates.
BOJ Governor Kazuo Ueda was expected to provide further guidance during a press conference later on Friday.
Some analysts described the rate decision as relatively dovish because the two dissenting votes reduced expectations for a more aggressive tightening cycle.
Investors are now watching closely for signals on the timing of future BOJ rate increases.
Wall Street Rebound Supports Asian Stocks
Asian markets also benefited from a strong overnight session on Wall Street.
The Nasdaq Composite jumped 1.7%, while the S&P 500 gained 1.1%.
The Dow Jones Industrial Average advanced 0.6%, while the Philadelphia Semiconductor Index surged 3.1%.
However, US stock futures showed some caution during Asian trading.
Nasdaq 100 futures slipped 0.2%, while S&P 500 futures fell around 0.1%.
Falling Oil Prices Ease Inflation Pressure
Lower energy prices provided another boost to market sentiment.
Brent crude fell around 1.2% to $103.56 per barrel, extending its decline for a third consecutive session.
The drop came as traders focused on the possibility of diplomatic progress surrounding the US-Iran conflict.
Saudi Arabia is also working to restore part of the capacity of its East-West oil pipeline after drone attacks disrupted operations.
Reports indicated that Riyadh could restore around half of the pipeline’s capacity within days.
China has also called on Iran to help reduce tensions involving Yemen’s Tehran-backed Houthi movement.
Any easing of regional tensions could reduce disruption risks around key shipping routes.
Bond Yields Fall as Energy Prices Retreat
Lower oil prices also helped support global bond markets.
The US 10-year Treasury yield fell nine basis points to 4.93% after reaching 5.02% earlier in the week.
Government bonds in Australia, Japan and New Zealand also gained.
Lower yields can help support equities, particularly technology and other growth-oriented stocks.
Asian Chip Stocks Rally After Volatile AI Week
Technology shares were among the strongest performers across Asian markets.
South Korea’s KOSPI jumped 2.7%, although the index remained around 0.8% lower for the week.
SK Hynix surged 5.8%, while Samsung Electronics climbed 3.4%.
Other semiconductor-related stocks also posted strong gains.
Kioxia advanced 7.1%, Murata rose 3.8%, TDK gained 1.4%, LG Innotek climbed 5.5%, and Largan also moved sharply higher.
The rebound followed a volatile week for artificial intelligence stocks.
Earlier concerns about calls from AI industry leaders for tighter safeguards and slower model development had triggered selling across parts of the technology supply chain.
However, investors returned to the sector as demand for AI infrastructure remained strong.
China Stocks Rebound as AI Shares Surge
Chinese equities also moved higher.
The CSI 300 gained 1.1% to 4,511.20, although it remained around 0.6% lower for the week.
The Shanghai Composite rose 0.9%, while Hong Kong’s Hang Seng Index advanced 0.7%.
Chinese AI and technology shares were among the strongest performers.
MiniMax surged 13.5%, while Z.AI gained 5.8%.
Alibaba climbed 4.3%, Baidu rose 2%, and JD.com added 0.4%.
Meituan edged 0.1% higher.
However, Tencent fell 0.6%, while NetEase declined 0.7%.
The moves suggest investors are once again showing interest in selected AI and technology stocks after earlier caution.
Other Asian Markets Trade Mixed
Elsewhere in the region, market performance was more subdued.
Australia’s S&P/ASX 200, New Zealand’s NZX 50 and Singapore’s Straits Times Index traded largely flat.
India’s Nifty 50 gained around 0.2%, while Thailand’s SET Index rose 0.3%.
The Philippines’ PSEi fell 1.2%, while Indonesia’s Jakarta Composite declined around 0.35%.
Asian Market Outlook Remains Focused on Rates and Oil
Asian stocks benefited from a combination of stronger technology shares, lower oil prices and easing bond yields.
However, investors remain focused on future interest rate decisions from the Bank of Japan and other major central banks.
Oil prices, Middle East tensions and the outlook for AI-related demand are also likely to remain important drivers for regional markets.
