Kospi At Record High As Asia Tech Rebounds While Fed, BoJ And Iran Keep Nerves Tight

Asia‑Pacific equities opened positively on Thursday as South Korea’s Kospi surged to a fresh record high and Japanese stocks looked set for strong gains, even as investors digested hawkish signals from central banks and remained alert to geopolitical risks.

CNBC data show that futures pointed to robust openings in Tokyo and Seoul, with Nikkei 225 futures trading well above their last cash close and the Kospi hitting new all‑time highs as trading resumed after Lunar New Year holidays in parts of the region. Australia’s S&P/ASX 200 climbed around 0.8% in early trade, tracking Wall Street’s overnight gains led by large US technology stocks.

The rebound follows a period of heightened volatility triggered by fears that massive AI‑related capital expenditures could weigh on tech earnings. Bloomberg reports that “AI angst” in US markets—where investors worry that generative‑AI models may disrupt business lines in software, professional services and real estate—has paradoxically fueled demand for Asian chipmakers and hardware suppliers that dominate the sector’s supply chain. The MSCI Asia Pacific Index has risen more than 12% so far in 2026, sharply outperforming the S&P 500 and Nasdaq 100, which are flat to modestly negative.

Reuters’ morning market wrap notes that Asian shares drew support from overnight US gains, but sentiment remains fragile as traders weigh US inflation data and progress in US‑Iran talks aimed at averting a broader conflict. Oil prices, which had jumped earlier on fears of disruption, eased somewhat as a Reuters commodities column suggested that the current “Iran premium” in crude markets still assumes no major supply outage.

Central‑bank expectations add another layer of complexity. A Reuters poll released on Wednesday found that most economists expect the Bank of Japan to lift its key policy rate to 1% by the end of June 2026—much sooner than previously forecast—as political pressure mounts ahead of elections and inflation runs above target. At the same time, the US dollar has firmed, with Reuters reporting higher Treasury yields and a greenback that is consolidating gains against the euro and yen amid signals that the Federal Reserve is in no rush to cut rates.

In Southeast Asia, flows are more nuanced. Reuters coverage of “holiday‑hit” Asian FX shows that the Indonesian rupiah weakened ahead of a Bank Indonesia policy meeting, while Philippine markets braced for a central‑bank decision that many economists expect will deliver a modest rate cut. Thai equities, by contrast, recently touched their highest levels since late 2024 on optimism over post‑election political stability and domestic recovery, even as FX markets remain subdued.

For Gulf investors increasingly active in Asia, the current backdrop is both an opportunity and a test. Gulf sovereign funds and banks that ramped up allocations to Asian tech and infrastructure during 2025 now face decisions on whether to add to positions amid strength or hold back in case AI‑related volatility flares again. Saudi Arabia’s recent opening of its own capital market to all foreign investors, meanwhile, gives Asian funds a reciprocal avenue into the GCC’s largest exchange.

Near‑term performance will hinge on three factors: whether AI‑linked earnings confirm bullish growth assumptions, how quickly the Fed and BoJ adjust policy, and whether US‑Iran diplomacy can keep energy markets calm. For now, the sight of the Kospi at record highs and the Nikkei not far behind underlines how central Asia has become to global equity narratives in the age of AI.