Asian markets rediscovered their appetite for risk on Thursday, helped by a fresh reminder that the AI trade still has hard earnings behind it.
Strong updates from Micron and Qualcomm steadied nerves after a bruising bout of volatility in chip shares, pushing investors back into Japan and South Korea’s technology-heavy markets.
The rebound was powerful, but not carefree. Oil’s retreat helped ease inflation anxiety, while a stronger dollar and a fragile yen kept the interest-rate debate firmly in view.
Chip earnings revive risk appetite
MSCI’s broad index of Asia-Pacific shares outside Japan rose 1.3% in early trading, while Japan’s Nikkei advanced more than 2%.
South Korea’s KOSPI jumped 5.5%, extending its position as one of the world’s strongest markets this year.
The catalyst came from the chip sector. Micron said customers had committed $22 billion for memory chips, a signal that AI-related demand remains firm despite concerns over stretched valuations.
Qualcomm added to the mood by targeting $15 billion in data centre sales by 2029, strengthening the case that AI spending is moving beyond a narrow group of winners.
Analysts said the results offered a badly needed reset for sentiment after recent selling.
Still, they warned that the rally may need more than one strong earnings cycle to quiet doubts about valuations, debt-funded AI infrastructure spending and future returns.
Oil gives inflation a softer edge
Energy markets moved in the opposite direction. Brent slipped to $73.34 a barrel, while West Texas Intermediate fell to $70.07 as stranded tankers began leaving the Strait of Hormuz.
The resumption of traffic has reduced the fear premium built into crude during the US-Israel conflict with Iran.
Cheaper oil could help cool some inflation pressure, especially after weeks in which energy risks had complicated the outlook for central banks.
The relief, however, is not complete. Traders remain cautious because the peace process is still fragile and shipping flows through the Gulf are not yet fully normal.
Dollar strength keeps policy risk alive
The next test is US inflation. 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.
That keeps the Federal Reserve under pressure and has helped lift the dollar. The yen traded around 161.73 per dollar, close to levels that could prompt fresh concern in Tokyo.
A break beyond 161.96 would push the currency 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.
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