Asian equity markets staged a sharp rebound on Thursday, driven by fresh evidence that artificial intelligence spending is translating into concrete orders rather than mere speculation. The rally was led by technology-heavy indices in Japan and South Korea, after Micron and Qualcomm delivered updates that calmed recent valuation fears in the semiconductor space.
MSCI's broad index of Asia-Pacific shares excluding Japan rose 1.3% in early trading. Japan's Nikkei advanced more than 2%, while South Korea's KOSPI surged 5.5%, extending its position as one of the world's best-performing markets this year. The moves reversed some of the losses seen in recent sessions, when geopolitical tensions and profit-taking had weighed on chip stocks.
Micron and Qualcomm Provide Demand Clarity
The primary catalyst came from Micron, which disclosed that customers had committed $22 billion for memory chips—a direct signal that AI-related demand remains robust despite concerns about stretched valuations. Qualcomm added to the positive sentiment by targeting $15 billion in data-center sales by 2029, reinforcing the narrative that AI spending is broadening beyond a narrow group of winners.
Analysts noted that these announcements offered a much-needed reset for investor sentiment after a bruising period of volatility. However, they cautioned that the rally may require more than a single strong earnings cycle to fully dispel doubts about valuations, debt-funded AI infrastructure spending, and the eventual returns on that capital.
For context, the chip sector had recently come under pressure amid fears that the AI boom might be overhyped. A previous selloff was triggered by concerns over helium supply disruptions linked to US-Iran tensions, which threatened semiconductor manufacturing. Thursday's data helped restore confidence that end-user demand remains intact.
Oil Retreats as Hormuz Traffic Resumes
Energy markets moved in the opposite direction, providing a tailwind for risk appetite. Brent crude slipped to $73.34 per barrel, while West Texas Intermediate fell to $70.07, as stranded tankers began leaving the Strait of Hormuz. The resumption of traffic reduced the geopolitical risk premium that had been built into crude prices during the US-Israel conflict with Iran.
Cheaper oil could help cool some inflation pressures, especially after weeks in which energy risks had complicated the outlook for central banks. However, traders remain cautious because the peace process is still fragile and shipping flows through the Gulf are not yet fully normalized.
Dollar Strength and Yen Pressure Persist
The next major test for markets is US inflation data. Thursday's personal consumption expenditures report is expected to show core prices rising 0.3% in May, with the annual rate at 3.4%. Headline inflation is forecast at 4.1% year-on-year. Such readings would keep the Federal Reserve under pressure to maintain higher interest rates for longer.
That outlook has lifted the dollar, keeping the yen under strain. The Japanese currency traded around 161.73 per dollar, close to levels that could prompt intervention from Tokyo. A break beyond 161.96 would push the yen to its weakest level since 1986. Gold also felt the squeeze from higher rate expectations and dollar strength, slipping below $4,000 an ounce for the first time this year.
The broader market backdrop remains mixed. While the AI-driven chip rally has provided a short-term boost, investors are watching for sustained earnings momentum and clarity on monetary policy. The recent volatility in Nasdaq futures highlighted how sensitive markets remain to both geopolitical shocks and inflation data.
This article is for informational purposes only and does not constitute financial advice.
