KOSPI rockets above 7,000 as AI stocks overpower yen and oil fears

South Korea’s KOSPI outperformed Asian markets on Wednesday while Japan’s Nikkei 225 recovered from the previous session’s selloff, as renewed strength in semiconductor and AI-related shares offset concerns over oil approaching $100 a barrel.

The KOSPI rose 1.67% to 7,070.94 by late morning, reclaiming the 7,000 mark as Samsung Electronics gained 1.48% and SK Hynix jumped 4.85%.

Japan’s Nikkei added about 0.35% to 65,495.23 by the midday break after swinging between gains and losses.

Taiwan’s TAIEX rose 0.6% and China’s CSI 300 added 0.2%, while Hong Kong’s Hang Seng fell 0.6% and Australia’s benchmark slipped about 0.3%.

KOSPI retakes 7,000 as chip rally extends

South Korean equities continued to draw support from semiconductors after the Philadelphia Semiconductor Index gained 1.3% overnight despite declines in the main US equity benchmarks.

Samsung and SK Hynix led the advance, while Hyundai Motor rose 0.52% and Hanwha Aerospace added 2.24%.

Hanwha Ocean gained 2.32% after being named preferred bidder for a Royal Thai Navy frigate project worth about $500 million.

The move extends a volatile run around the psychologically important 7,000 level.

Mirae Asset Securities research head Park Yeon-joo told Seoul Economic Daily this week that the KOSPI’s ability to establish itself above 7,000 will depend largely on the durability of AI investment and earnings growth at major chipmakers.

She also sees Korean equities as undervalued relative to their underlying earnings power.

Nikkei rebounds but yen keeps exporters on edge

Japanese stocks also found support from technology shares after Tuesday’s 1.7% decline.

SoftBank Group, Lasertec and Kokusai Electric were among the early gainers.

Cable makers surged after Corning struck a multibillion-dollar supply agreement with Verizon covering high-density optical fibre and connectivity products between 2027 and 2032. Fujikura, Furukawa Electric and Sumitomo Electric all jumped in Tokyo.

The stronger yen remains the main complication for the Nikkei. The currency traded around 153.3 per dollar, near its strongest level since February.

LPL Financial strategist Adam Turnquist said that markets now imply roughly a 98% probability of a Bank of Japan rate increase this month, supported by firmer GDP, inflation and wage data.

A stronger yen can pressure Japanese exporters by reducing the value of overseas earnings.

Oil near $100 keeps rate risks alive

The chip rally is unfolding against a more difficult macro backdrop.

Brent crude climbed towards $100 a barrel after further attacks on Saudi energy infrastructure and renewed fighting involving Iran and US forces. WTI was trading around $94.5.

As per experts, the latest escalation has intensified concerns about prolonged disruption to Persian Gulf supply.

Higher crude is particularly important for import-dependent Japan and South Korea because it can lift domestic costs and complicate the inflation outlook.