Asia Stocks Surge as Yen Recovers Amid Suspected Intervention

Asia's stock markets rebounded sharply on Friday, driven by strong performances in key indices and optimism surrounding AI-linked assets. The yen also staged a significant recovery after suspected coordinated intervention from Japanese and South Korean authorities ahead of the Bank of Japan's rate decision.

The Kospi in South Korea jumped 14% intraday, marking a record reversal, as chip stocks and regulatory easing stabilized the market. However, despite this resurgence, the index remains down sharply for the month, poised to lose 24% in July, its largest monthly decline since 1997.

Experts attribute the turnaround to positive earnings from AI heavyweights Microsoft and Amazon, which lifted sentiment and contributed to the rebound of chip stocks. Fabien Yip, a market analyst at IG, noted that 'the AI demand story didn't really decelerate; it seems like it's still sustainable.'

The yen's recovery was attributed to suspected intervention by Japanese and South Korean authorities, with some speculating that U.S. authorities may also have been involved. The currency rebounded from near-164 to below 160 per dollar, easing pressure on the dollar and keeping the euro near an over one-month high at $1.1518.