Japan’s Benchmark Soars on AI Optimism
Asian shares predominantly increased in Wednesday morning trading, with Japan’s benchmark reaching a record high, as investors were encouraged by an overnight US Market rally that appeared to signify optimism regarding the artificial-intelligence boom. Japan’s benchmark surged 1.3 percent to 58,081.62. That occurred despite China’s action the day before to limit exports to 40 Japanese companies and organisations it claims are aiding Japan’s “remilitarisation”. The response was mixed, as the stock prices of certain listed companies increased, such as Subaru Corp and Mitsubishi Materials Corp, while others experienced declines, including Eneos Corp and Sumitomo Heavy Industries. Experts noted that the weakening yen has contributed to an increase in export shares, including those of Honda Motor Co and Panasonic Corp. The US dollar decreased to 155.78 Japanese yen, down from 155.83 yen. The dollar was trading near the 160 yen mark several months ago. The euro was valued at $1.1784, an increase from $1.1779. Australia’s S&P/ASX 200 surged 1.1 per cent to 9,122.50. South Korea’s Kospi surged 1.7 percent to 6,069.36. Hong Kong’s Hang Seng increased by 0.3 per cent, reaching 26,668.83, while the Shanghai Composite gained 0.7 per cent, climbing to 4,147.68.
Investors are closely monitoring President Donald Trump’s State of the Union address, which is being delivered during the daytime for Asia. Trump aims to persuade a growing number of sceptical Americans that the US economy is robust and that his policies bolster the domestic job market and manufacturing sector. On US Market, the S&P 500 rose by 0.8 percent on Tuesday, regaining nearly three-quarters of the significant decline experienced the previous day. The Dow Jones Industrial Average increased by 370 points, representing a rise of 0.8 percent, while the Nasdaq composite saw a gain of 1 percent. Advanced Micro Devices played a pivotal role in the market, surging 8.8 percent following the announcement of a multiyear agreement to supply chips to Meta Platforms, aimed at bolstering its AI initiatives. According to the agreement, Meta secured the option to purchase as many as 160 million shares of AMD stock for just 1 cent each, contingent in part on the quantity of chips that Meta ultimately acquires. It serves as a reminder of the excitement that has developed in recent years regarding the billions of dollars flowing into AI, marking a significant shift from the previous day, when concerns about the potential drawbacks of AI unsettled US Market. IBM experienced a 2.7 per cent increase, partially offsetting its significant 13.1 per cent decline from Monday, marking its most substantial drop since 2000.
On Tuesday, Anthropic introduced new tools designed for businesses to utilise alongside its Claude AI assistant. They reported on a wide range of topics, including human-resources work, engineering, and investment banking. The event indicated that concerns regarding AI replacing current software, instead of simply enhancing usability, might be exaggerated, as noted by Dan Ives. While these use cases are impressive, the reality is that these new AI tools will not rip and replace existing software ecosystems and data environments. “These AI tools are only as useful as the data it can reach,” he said. Major US corporations consistently reported profits for the end of 2025 that exceeded analysts’ expectations. Keysight Technologies surged 23.1 percent, marking the largest increase in the S&P 500, while Home Depot climbed 2 percent after also reporting profit and revenue that exceeded analysts’ expectations.
The S&P 500 experienced an increase of 52.32 points, reaching a total of 6,890.07. The Dow Jones Industrial Average increased by 370.44, reaching 49,174.50, while the Nasdaq composite rose by 236.41 to 22,863.68. In the bond market, Treasury yields remained largely unchanged following a report indicating that confidence among US consumers rose more than economists had anticipated. The yield on the 10-year Treasury remained steady at 4.03 percent, consistent with its position late Monday. In energy trading, benchmark US crude increased by 45 cents, reaching $66.08 a barrel. Brent crude, the international benchmark, increased by 47 cents to reach $71.24 a barrel.
