Japanese and Korean stock markets opened higher and continued to rise; Samsung Electronics rose 5%, FTSE China A50 Index futures opened up 0.13%.

February 19—Boosted by the rebound in tech stocks and positive US economic data driving strong overnight performance in US equities, Asian stock markets generally rose. Heightened geopolitical tensions pushed up oil prices, and after posting the largest single-day increase since last October, crude oil continued its upward momentum. Australian and Japanese stock markets strengthened, while Korea’s benchmark stock index hit a historic high. In the previous trading day, major Wall Street indexes ended higher, with the S&P 500 up 0.6% and the tech-heavy Nasdaq 100 up 0.8%. The robust rebound in the tech sector indicates that **fears over the disruptive impact of artificial intelligence are gradually fading, and investors are buying the dip** to capture opportunities in stocks returning to reasonable valuations. Paul Stanley, managing partner at Granite Bay Wealth Management, said the sell-off in software stocks may be “overdone,” largely as an instinctive response while investors try to figure out which AI companies will win or lose. He stated: > “Although the prospects for AI are vast, investors should not assume that all companies will succeed in the field of artificial intelligence.” In currency markets, **the US dollar rebounded from recent lows and the yen came under pressure.** The recently released US Federal Reserve meeting minutes showed clear disagreement among policymakers over the future path of interest rates. The minutes suggest that even with a new chair taking office in May, there could be significant resistance to pushing forward interest rate cuts. Corpay Asia Pacific currency strategist Peter Dragicevich commented: > “This indicates there’s no urgency to cut rates again, and we’re unlikely to see rate cuts at least before the current chair (Jerome Powell) finishes his term in May.” Key market moves are as follows: > Nikkei 225 opened up 0.57%. > Korea’s KOSPI rose 3%, hitting a historic high. > Samsung Electronics jumped more than 4%, reportedly negotiating a $700 unit price for HBM4. > 10-year Japanese government bond yields rose 1 basis point to 2.145%. > The yen/dollar exchange rate held steady at 154.73 yen to 1 dollar. > Spot gold fell 0.2% to $4,967.93 per ounce. > West Texas Intermediate crude dropped 0.1% to $65.12 per barrel. > Korea’s KOSPI rose 3%, reaching a historic high. Samsung Electronics rose above 4%, reportedly negotiating a $700 unit price for HBM4. Korea’s KOSPI index rose 3%, hitting a historic high. Samsung Electronics jumped more than 4%, reportedly negotiating a $700 unit price for HBM4.

**Dragged down by overnight drops in US Treasuries, Japanese government bond futures remained weak.** The traditional linkage between the two countries’ bonds makes it difficult for the Japanese market to escape external pressure. Investors are closely watching a 20-year government bond auction later today, totaling about 800 billion yen. Citi strategist Tomohisa Fujiki believes the potential for further gains in ultra-long-term government bonds is limited, demand may only be temporary, and is expected to gradually fade by the end of March.

**The continued strength of the US dollar is putting pressure on the yen exchange rate.** During Thursday’s Asian session, the dollar-yen hovered near 154.6, down from the 152 level seen last week after Prime Minister Sanae Takaichi’s overwhelming election victory. Newswise, the Trump administration announced a $36 billion investment project, marking the first batch of projects under Japan’s previous $550 billion investment commitment to the US. The yen has maintained weakness for a long time, dragged down by low domestic interest rates and concerns over the fiscal deficit. However, recent improved expectations for Japan’s economic growth have provided rare support for the yen. ING Global Research Director Chris Turner said: > “Japan’s direct investment in the US will be an important focus for this year and adds complexity to dollar/yen dynamics. The issue facing the foreign exchange market this year is whether this investment will support dollar inflows, or if Japan will use its foreign exchange reserves to guarantee new dollar loans to avoid pressure on the yen. Tokyo seems to prefer the latter.”

Amid escalating US-Iran conflict risks, **gold’s appeal as a safe-haven asset has grown, with prices rising slightly in Asian morning trading.** Spot gold rose as much as 0.2% to $4,986 per ounce. The analyst team at InTouch Capital Markets commented that market fears of a possible US-Iran war have resurged. They cited media reports that, as prospects of a deal remain slim, the Trump administration may prefer confrontation with Iran, with joint action with Israel being most likely.

**Geopolitical tensions are rising, and oil prices stabilized after surging.** Previous reports suggested US military intervention in Iran could happen sooner than expected, reigniting supply concerns. Wednesday’s closing data showed WTI crude up 4.6% to over $65, while Brent crude returned to the $70 threshold, hitting a two-week high. Axios reported US military operations may continue for weeks, and Israel is actively promoting plans to topple Iran’s regime. Escalating geopolitical risk is becoming a dominant short-term factor for oil prices.

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