Wall Street’s rebound, major chip deals, and a weaker yen fueled risk appetite, even as China imposed export curbs.
Asian equities mostly advanced on Wednesday, with Japan’s benchmark index surging to a record high, as investors rode a renewed wave of AI-driven optimism from Wall Street.
Japan’s benchmark jumped 1.3% to 58,081.62, even as China imposed export restrictions on 40 Japanese firms. These measures, which Beijing claims address Japanese support of Tokyo’s recent defense policy shifts, add pressure in a region already tense over historical disputes and territorial claims.
For now, markets favor momentum over geopolitics.
Japan: Record High Despite Tensions
Japan’s surge came amid a complex backdrop.
Meanwhile, China’s latest move to curb exports to dozens of Japanese companies added diplomatic friction. Nonetheless, investors appeared more focused on global tech tailwinds and currency trends.
Stock reactions were mixed:
- Subaru Corp and Mitsubishi Materials Corp gained.
- Eneos Corp and Sumitomo Heavy Industries declined.
Analysts pointed to a softer yen as a key catalyst for exporters.
The US dollar traded at 155.78 yen, little changed from 155.83 yen, and below levels near 160 yen seen months ago. A weaker yen typically boosts overseas earnings for exporters such as Honda Motor Co and Panasonic Corp.
Additionally, the euro edged up to $1.1784 from $1.1779.
Broader Asia Tracks Wall Street Gains
Elsewhere in the region:
- Australia’s S&P/ASX 200 rose 1.1% to 9,122.50
- Similarly, Hong Kong’s Hang Seng added 0.3% to 26,668.83, while the Shanghai Composite gained 0.7% to 4,147.68.
Investors are also watching President Donald Trump’s State of the Union address, delivered during Asia’s trading day, for signals on US economic strength and manufacturing policy.
Wall Street Rebounds on AI Deal Momentum
Earlier, US markets staged a strong recovery overnight.
The S&P 500 climbed 0.8% to 6,890.07, recouping nearly three-quarters of its prior drop. The Dow Jones Industrial Average rose 370.44 points (0.8%) to 49,174.50, while the Nasdaq Composite gained 1% to 22,863.68.
Specifically, chipmaker Advanced Micro Devices (AMD) rallied 8.8% after unveiling a multiyear deal to supply processors to Meta Platforms for its AI infrastructure push.
Meta secured rights to buy up to 160 million AMD shares at 1 cent each, contingent in part on chip purchases. The agreement underscores that billions in capital continue to flow into AI.
This also marked a sharp shift from Monday’s session, when concerns about AI’s disruptive risks rattled tech stocks.
AI Fears May Be Overblown?
IBM rose 2.7%, recovering part of Monday’s 13.1% drop, its worst since 2000.
Meanwhile, Anthropic introduced new enterprise tools tied to its Claude AI assistant, targeting applications across HR, engineering, and investment banking.
Dan Ives of Wedbush argued that fears of AI “rip and replace” disruption may be overstated. These tools, he said, depend on existing data ecosystems and complement rather than eliminate established software infrastructure.
As a result, that nuance appears to be calming nerves.
Earnings and Bonds Hold Steady
Corporate earnings further fueled the rally.
For example, Keysight Technologies surged 23.1%, the S&P 500’s biggest gainer, after topping profit expectations. Home Depot rose 2% on stronger-than-expected results.
In bonds, the 10-year US Treasury yield held steady at 4.03% after data showed US consumer confidence improved more than economists anticipated.
Energy markets edged higher:
- US crude rose 45 cents to $66.08 per barrel.
- Brent crude gained 47 cents to $71.24 per barrel.
For now, the AI narrative remains the market’s primary engine. The question is whether geopolitics—or valuations—eventually tap the brakes.
TL;DR
Asian markets climbed, with Japan hitting a record high, as Wall Street rebounded on optimism about AI. AMD’s multiyear Meta deal lifted US tech stocks, easing prior disruption fears. Despite China’s export curbs on Japanese firms, investors focused on currency trends and earnings strength.
AI summary
- Japan index up 1.3% to record 58,081.62
- Wall Street rebounds on AMD–Meta AI deal.
- S&P 500 gains 0.8%, Nasdaq up 1%
- China restricts exports to 40 Japanese firms.
- US 10-year yield steady at 4.03%
