Asia Markets Stage Turnaround as BOJ Keeps Rates on Hold

Asian markets staged a remarkable turnaround on Friday, rallying in tandem with Wall Street as South Korea's battered market made a record comeback.

The KOSPI surged 17%, reversing steep losses from earlier in the week, while Japan's Nikkei advanced nearly 4% and MSCI's broadest index of Asia-Pacific shares outside Japan rose 6%.

The turnaround was attributed to upbeat earnings and forecasts from AI heavyweights Microsoft and Amazon, which eased concerns over hefty capital spending. Market analyst Fabien Yip noted that the AI demand story didn't decelerate, and the selloff may have been an overreaction to those concerns.

The yen, however, held some distance away from a 40-year trough after suspected coordinated intervention by various authorities in the previous session. The Bank of Japan (BOJ) kept rates on hold on Friday, with focus now on BOJ Governor Kazuo Ueda's press conference later in the day.

The BOJ's decision was seen as hawkish, but there were few signals suggesting a shift in the gradual six-month per hike path or next rate hike earlier than December. The yen had already been sliding prior to the decision due to nerves over further action from authorities.