Chip Stocks Rally Lifts Kospi, Nikkei as Oil Risk Lingers

Market Overview

South Korea's Kospi index rose 2.5% on Thursday, rebounding from a seven-week low, while Japan's Nikkei climbed 1.5% as chip stocks surged on positive catalysts. The rally followed a $30 billion supply deal between Broadcom and Apple and reports that China may permit limited purchases of Nvidia's H200 chips. However, oil prices rose 1% amid escalating US-Iran hostilities, pushing Japan's 10-year government bond yield to multi-decade highs and pressuring rate-sensitive sectors.

Key Drivers

Chipmakers led gains in both markets: SK Hynix jumped 7%, Samsung Electronics rose 2.5%, and Kioxia surged 9%. Foreign investors bought $220 million in Korean shares, though the won weakened slightly against the dollar. In contrast, autos and real estate stocks lagged amid oil-driven inflation concerns.

Macro Risks and Implications

The renewed US-Iran tensions have rekindled fears of supply disruptions, lifting oil prices and stoking inflation expectations. This dynamic is pressuring the Japanese yen, with USDJPY testing key resistance levels as traders weigh the impact of higher energy costs on the Bank of Japan's monetary policy. The split market reaction—chip-led optimism versus oil-driven caution—suggests a cautious risk appetite among investors.

Traders' Focus

Forex traders should monitor developments in the Middle East for further oil price volatility and its spillover effects on global bond markets. The Bank of Japan's response to rising yields and inflation data will be critical for USDJPY direction. Meanwhile, semiconductor stocks remain a focal point for equity and currency markets, with potential for continued sector-specific rallies.

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