Asian Equities Climb as AI Momentum Lifts Risk Appetite

Key Moments

Major Asian benchmarks advanced, led by a 1.8% rise in Japan’s Nikkei 225 to 50,402.39 on strong semiconductor and AI-related gains.
The Japanese yen remained weak around 157.40 per dollar despite the Bank of Japan’s rate hike to a 30-year high, prompting a warning from currency regulators.
A rebound in U.S. technology names such as Nvidia and Broadcom, along with a 0.9% gain in the S&P 500, supported risk sentiment across global markets.

Asian Markets Track Wall Street Rally

Equity markets across Asia moved higher Monday, taking their lead from a strong rebound in U.S. technology and AI-related shares that pushed Wall Street to solid gains.

Japan’s Nikkei 225 advanced 1.8% to 50,402.39, supported by pronounced strength in chipmakers and other companies tied to the artificial intelligence boom. Semiconductor producer Tokyo Electron climbed 6.3%, while chip testing equipment maker Advantest rose 4.5%.

Financial stocks and exporters in Japan also gained after the Bank of Japan lifted its key policy rate on Friday to its highest level in three decades. Rather than firming, the yen has weakened toward its lowest levels of the year.

Index	Market	Move	Level
Nikkei 225	Tokyo	+1.8%	50,402.39
Hang Seng	Hong Kong	+0.1%	25,713.53
Shanghai Composite	Shanghai	+0.7%	3,917.72
Kospi	South Korea	+2.1%	4,105.93
Taiex	Taiwan	+1.6%	–
S&P/ASX 200	Australia	+0.9%	8,699.90

In Hong Kong, the Hang Seng index inched up 0.1% to 25,713.53, while the Shanghai Composite index increased 0.7% to 3,917.72. China’s central bank kept its 1-year and 5-year loan prime rates unchanged, in line with expectations.

South Korea’s Kospi gained 2.1% to 4,105.93, and Taiwan’s Taiex climbed 1.6%, supported by a 2.5% advance in chip giant TSMC. In Australia, the S&P/ASX 200 rose 0.9% to 8,699.90.

“Asian equity markets are stepping onto the floor with a constructive bias, taking their cue from Friday’s solid rebound in U.S. stocks and the growing belief that the final stretch of the year still belongs to the bulls,” Stephen Innes of SPI Asset Management said in a commentary.

Currency Moves and Policy Backdrop

Despite the Bank of Japan’s move to raise its key rate to a 30-year high, the yen remained under pressure. Early Monday, the U.S. dollar traded at 157.40 yen, compared with 157.60 late Friday.

Heavy selling of the yen against the dollar prompted Atsushi Mimura, a senior Finance Ministry official overseeing foreign exchange matters, to caution that authorities were prepared to act to counter “excessive” currency swings.

The euro slipped marginally to $1.1719 from $1.1720.

Wall Street’s AI-Led Recovery Supports Sentiment

U.S. equity futures pointed higher after major U.S. indexes ended Friday in positive territory, with technology and AI-related names driving the advance.

The S&P 500 gained 0.9% on Friday, finishing the week up 0.1%. The Dow Jones Industrial Average added 0.4%, and the Nasdaq composite rose 1.3%, recording a 0.5% weekly increase.

Nvidia was the largest single contributor to Friday’s market gains, closing up 3.9%. Broadcom also rallied, climbing 3.2%. The technology sector has been a key driver for Wall Street throughout the year as large-cap names such as Nvidia wield increased influence on the broader market. At the same time, investors have been scrutinizing elevated valuations and debating whether they can be justified.

Corporate Highlights: Oracle, TikTok Deal and Housing Weakness

Oracle shares jumped 6.6% after the company said it had signed agreements, alongside two other investors, to establish a new TikTok U.S. joint venture. Under the arrangement, Oracle, Silver Lake and MGX will each hold a 15% stake in the social media platform, allowing it to continue its operations in the United States.

Homebuilding stocks were under pressure after data showed home sales declined from a year earlier for the first time since May. KB Home fell 8.5% following the report.

Mixed U.S. Macro Signals

A University of Michigan survey indicated that consumer sentiment in December improved modestly from November but remained significantly below levels from a year earlier.

Consumer confidence has been eroding over the course of the year as persistent inflation weighs on households. The labor market is cooling, retail sales are softening, and both businesses and consumers are increasingly focused on the ongoing impact of a broad U.S.-led trade war affecting key partners such as China and Canada.

Inflation remains above the Federal Reserve’s 2% goal. The Fed lowered its benchmark interest rate at its most recent meeting, reflecting concerns that a slowing job market could drag on economic growth. However, policymakers also face the risk that additional rate cuts could stoke inflation further, potentially undermining the expansion.

The Fed has signaled a cautious approach to interest rate decisions heading into 2026, and market participants largely expect the central bank to keep rates unchanged at its upcoming meeting in January.

Energy Markets

In early Monday trading, U.S. benchmark crude oil rose 68 cents to $57.20 per barrel. Brent crude, the international benchmark, gained 70 cents to $61.17 per barrel.