Asian markets diverged sharply on Tuesday, with South Korea's KOSPI surging past 7,100 on a renewed AI-driven chip rally, while Japan's Nikkei 225 hovered near the flatline as a strengthening yen weighed on exporter shares.
The KOSPI extended Monday's 4% jump, adding 1.82% to reach 7,122.93 by late morning. Samsung Electronics rose 2.59% and SK Hynix gained 3.98%, with foreign and institutional investors net buyers of over 610 billion won, offsetting retail selling.
The optimism stems from expectations of a tight memory-chip market. According to recent analysis, KB Securities forecasts exceptionally tight memory supply next year, with inventories at Samsung and SK Hynix reportedly below 10 days. Nomura Securities also views the two stocks as undervalued relative to expected global semiconductor capacity expansion.
In contrast, Tokyo faced a different challenge. The yen strengthened to the 153-per-dollar level, its strongest since February, reducing the value of overseas earnings for exporters. Toyota, machinery, and electronics stocks were among the early laggards.
The yen's rise followed stronger Japanese economic data. Second-quarter GDP growth was revised up to an annualised 1.4% from 1.1%, while real wages increased 2.4% in July. Nominal wages jumped 4.7%, the fastest pace since 1997. Capital Economics noted that accelerating wage growth makes a quicker pace of Bank of Japan tightening increasingly compelling, with markets pricing a high chance of a rate hike at the September 17-18 meeting.
The broader macro backdrop remains challenging. Brent crude hovered above $97 a barrel amid renewed US-Iran tensions and fears of disruption around the Strait of Hormuz, while WTI traded above $92. The US 10-year Treasury yield stood around 4.79%, and markets priced roughly a 60% chance of another Federal Reserve rate increase this month.
Friday's US inflation report is the next major test for global equities. The dollar index traded near 98.82, gold gained about 0.5% to $4,428 an ounce, and bitcoin edged up 0.1% to around $79,333. Ether added 0.2% to roughly $2,499.
For investors, the divergence between Seoul and Tokyo underscores how currency dynamics and sector-specific catalysts are driving regional performance. While chip demand optimism supports Korean equities, Japan's export-heavy market remains sensitive to yen strength and BOJ policy signals.
This article is for informational purposes only and does not constitute financial advice.
