Asian Markets Rebound as Microsoft and Amazon Boost AI Confidence
Asian markets rallied on Friday after Microsoft and Amazon delivered strong quarterly results, reassuring investors of continued strength in cloud computing and AI-related demand.
The rebound followed a sharp selloff earlier in the week across semiconductor and AI-related companies, with South Korea's KOSPI surging 14% and Japan's Nikkei 225 gaining more than 3%. MSCI's broad Asia-Pacific index excluding Japan rose 5%, reflecting renewed confidence that recent declines reflected a reset in valuations rather than a deterioration in long-term AI demand.
The Bank of Japan (BOJ) kept its short-term policy rate unchanged at 1% following an 8-1 vote by its Policy Board, with board member Hajime Takata dissenting in favor of another 25-basis-point increase due to continued inflation risks. Attention has now shifted to Governor Kazuo Ueda's press conference for clearer guidance on future interest-rate increases and the BOJ's assessment of inflation, wage growth, and currency weakness.
The Japanese yen steadied after recovering from a 40-year low following what traders and officials believe was coordinated currency intervention led by Japanese authorities. The yen traded around 160.66 per U.S. dollar following the BOJ's policy announcement, with market participants viewing Governor Ueda's remarks as critical in determining whether recent gains can be sustained.