HONG KONG: Tech stocks propelled Tokyo’s Nikkei higher on Friday as most Asian markets advanced amid optimism about US interest rate cuts.
Investors maintained positive sentiment heading into the weekend despite ongoing concerns about a partial US government shutdown.
Global market rallies this year have been primarily driven by massive corporate investments in artificial intelligence technologies.
Traders continue chasing AI-related opportunities, pushing some major company valuations to unprecedented levels.
US chip giant Nvidia recently achieved a $4 trillion market capitalization amid this technology frenzy.
South Korean semiconductor leaders Samsung and SK hynix provided additional momentum this week by announcing preliminary deals with OpenAI.
The agreements involve supplying chips and equipment for OpenAI’s ambitious Stargate AI project.
Japanese conglomerate Hitachi further boosted regional sentiment by revealing its own strategic partnership with OpenAI.
Hitachi’s stock surged more than nine percent following the AI collaboration announcement.
Other Japanese technology companies followed with substantial gains during Friday’s trading session.
Renesas Electronics climbed nearly nine percent while Sony advanced 2.8 percent.
Chip testing equipment maker Advantest rose more than three percent alongside tech investment giant SoftBank.
Tokyo’s Nikkei index recorded sharp gains alongside advances in Sydney, Wellington, Taipei, Jakarta and Manila markets.
Hong Kong experienced slight declines after rallying more than four percent over the previous three trading days.
Singapore markets also edged lower while Shanghai remained closed for a national holiday.
Wall Street’s three main indexes all reached record highs on Thursday, extending the global rally.
Recent US labour market data indicating an economic slowdown has reinforced expectations for Federal Reserve rate cuts.
The central bank has already reduced borrowing costs and signaled further monetary easing ahead.
Positive market sentiment has largely overshadowed Washington’s political standoff causing partial government shutdowns.
Some US government services have suspended operations, potentially delaying key employment data releases.
Analysts believe the shutdown won’t prevent the Fed from implementing another expected rate cut this month.
Pepperstone analyst Chris Weston noted the government shutdown might temporarily reduce US GDP by $15-20 billion.
Weston suggested the economic impact should be negligible since lost activity would likely be recovered later.
He acknowledged potential risks if former President Trump’s threats about permanent government worker furloughs materialize.
The analyst maintained confidence that US government operations would resume before critical economic data releases.
A Senate vote is expected Friday on a House resolution to fund government operations through November 21.
Japanese beer manufacturer Asahi faced production disruptions at several factories following a cyber attack.
The company’s ordering and delivery systems were compromised, forcing temporary production halts.
Asahi officials could not provide a timeline for restoring normal operations amid the cybersecurity incident. – AFP