U.S. Indexes Advanced Towards Record Highs as Earnings Roll In

Stocks in New York extended their 2-day gains as improving global risk sentiment and upbeat corporate earnings outweighed a rebound in oil prices. 

The S&P 500 Index increased 0.2%, and the Nasdaq Composite advanced 0.4% as investors favored AI- and semiconductor-linked stocks. 

Market sentiment remained positive as leading tech companies signaled their commitment to continue to invest in artificial intelligence infrastructure. 

Nvidia, AMD, Intel, SanDisk, Micron Technology, and Applied Materials advanced between 5% and 10% over the two trading sessions and extended their gains in Tuesday's trading. 

After the close of the regular trading session, AMD, McDonald's, Caterpillar, and SpaceX are scheduled to report their quarterly results. 

In Monday's trading, the S&P 500 Index advanced 1.3%, and the tech-focused Nasdaq Composite gained 2.1%. supporting the higher openings in Asia on Tuesday. 

However, benchmark indexes in Japan struggled to advance amid worries that the stronger yen could weaken earnings growth for export-driven companies.   Indexes in China closed mixed as investors focused on the weakening macroeconomic backdrop, despite resilient exports and an improving outlook for leading AI-related and semiconductor-related stocks. 

In Europe, the DAX index increased 0.4% in Frankfurt, the CAC-40 index fell 0.02%, and the FTSE 100 index inched higher by 0.35%. 

U.S. Movers 

Palantir Technologies soared 17% to $147.16 after the AI and data analytics company reported a 93% rise in revenue from a year ago in its latest quarter. 

Deutsche Lufthansa AG decreased 10.8% to €8.22 after the German state-controlled airline reported a 56% drop in core profit in the second quarter because of a labor strike and a sharp jump in jet fuel costs. 

Lufthansa said revenue rose 8% to €11.1 billion, and adjusted operating earnings dropped to €383 billion from €870 million a year ago.  

Caterpillar Inc. rose 7.6% to $893.70 after the construction and power equipment maker reported better-than-expected second quarter results, driven by power generation demand and data center spending. 

Revenue increased 24% to $20.5 billion from $16.6 billion, net income advanced to $3.6 billion from $2.2 billion, and diluted earnings per share rose to $7.77 from $4.62 a year ago. 

Power generation revenue soared 29% to $3.1 billion from $2.4 billion, oil & gas sales increased 9% to $2.1 billion from $1.9 billion, and industrial sales advanced 9% to $1.7 billion from $1.5 billion a year ago. 

Overall construction division sales soared 35% to $8.3 billion from $6.2 billion, and resource industries sales increased 20% to $4.6 billion from $3.9 billion a year ago. 

India Update

Stocks in Mumbai lacked direction amid geopolitical uncertainty, and investors reacted to corporate earnings. 

The BSE Sensex 30 Index increased 0.2%, the Nifty 50 Index decreased 0.6%, and the rupee traded around 95.43 against the U.S. dollar. 

India Indexes and Stocks

The BSE Sensex 30 index increased 0.2% to 78,805.05, and the Nifty 50 Index decreased 0.6% to 24,619.15. 

US-Japan Yen Intervention May Prove to Be a Blip in the Longer-Term

Japan's indexes traded down for the second consecutive session, and investors assessed the latest currency intervention to arrest the decline in Japanese yen.  

The Nikkei 225 Stock Average decreased 0.7%, the broader TOPIX fell 0.6%, and the yen traded at 157.87 against the U.S. dollar. 

The broader stock market indexes traded down, driven by declines in tech stocks despite gains in AI- and semiconductor-linked stocks in overnight trading in New York. 

Market sentiment remained cautious amid a worry that a stronger yen could dampen earnings growth for the export-driven companies after Japan's currency appreciated 5% over the previous three sessions. 

The US-Japan joint intervention , the first since 1998, is likely to support the yen between the 156 and 160 levels; however, the longer-term downward trajectory of Japan's embattled currency is not likely to alter. 

Last month, the yen dropped to a four-decade low of 163.56 against the U.S. dollar amid mounting fiscal deficit concerns, a persistent interest rate differential, and mounting pressures from elevated energy costs. 

Moreover, the Bank of Japan's reluctance to lift rates to positive real interest rates has kept the yen under pressure over the last seven years.  

Japan Indexes and Stocks 

The Nikkei 225 Stock Average decreased 0.7% to 63,333.35, and the broader TOPIX declined 0.6% to 3,936.48. 

Stock market indexes traded down as a stronger yen clouds the earnings outlook for Japan's export-driven companies, making the domestic equities less attractive to foreign investors. 

Tokyo Electron Ltd. increased 1.4% to ¥55,810.0, Advantest Corp. decreased 3.9% to ¥30,210.0, Lasertec Corp. jumped 5.3% to ¥43,090.0, and Kioxia Holdings advanced 1.3% to ¥49,790.0. 

Murata Manufacturing eased 1.3% to ¥7,068.0, Fujikura Ltd increased 6.9% to ¥4,588.0, and Nidec added 0.6% to ¥2,702.0. 

Toyota Motor decreased 0.9% to ¥2,936.0, Honda Motor declined 0.4% to ¥1,560.50, and Nissan Motor eased 0.3% to ¥324.10.  

Sumitomo Mitsui Financial Group decreased 1% to ¥6,551.0, Mitsubishi UFJ Financial Group declined 2.6% to ¥3,473.0, and Mizuho Financial added 0.4% to ¥8,127.0. 

US-Japan Yen Intervention May Prove to Be a Blip in the Longer-Term

Japan's indexes traded down for the second consecutive session, and investors assessed the latest currency intervention to arrest the decline in Japanese yen.  

The Nikkei 225 Stock Average decreased 0.7%, the broader TOPIX fell 0.6%, and the yen traded at 157.87 against the U.S. dollar. 

The broader stock market indexes traded down, driven by declines in tech stocks despite gains in AI- and semiconductor-linked stocks in overnight trading in New York. 

Market sentiment remained cautious amid a worry that a stronger yen could dampen earnings growth for the export-driven companies after Japan's currency appreciated 5% over the previous three sessions. 

The US-Japan joint intervention , the first since 1998, is likely to support the yen between the 156 and 160 levels; however, the longer-term downward trajectory of Japan's embattled currency is not likely to alter. 

Last month, the yen dropped to a four-decade low of 163.56 against the U.S. dollar amid mounting fiscal deficit concerns, a persistent interest rate differential, and mounting pressures from elevated energy costs. 

Moreover, the Bank of Japan's reluctance to lift rates to positive real interest rates has kept the yen under pressure over the last seven years.  

Japan Indexes and Stocks 

The Nikkei 225 Stock Average decreased 0.7% to 63,333.35, and the broader TOPIX declined 0.6% to 3,936.48. 

Stock market indexes traded down as a stronger yen clouds the earnings outlook for Japan's export-driven companies, making the domestic equities less attractive to foreign investors. 

Tokyo Electron Ltd. increased 1.4% to ¥55,810.0, Advantest Corp. decreased 3.9% to ¥30,210.0, Lasertec Corp. jumped 5.3% to ¥43,090.0, and Kioxia Holdings advanced 1.3% to ¥49,790.0. 

Murata Manufacturing eased 1.3% to ¥7,068.0, Fujikura Ltd increased 6.9% to ¥4,588.0, and Nidec added 0.6% to ¥2,702.0. 

Toyota Motor decreased 0.9% to ¥2,936.0, Honda Motor declined 0.4% to ¥1,560.50, and Nissan Motor eased 0.3% to ¥324.10.  

Sumitomo Mitsui Financial Group decreased 1% to ¥6,551.0, Mitsubishi UFJ Financial Group declined 2.6% to ¥3,473.0, and Mizuho Financial added 0.4% to ¥8,127.0. 

China Indexes Lacked Momentum Ahead of International Trade and Inflation Updates

Stocks in China lacked direction on Tuesday as investors focused on unresolved U.S.-China trade tensions and cooling energy prices in international markets. 

The Hang Seng Index decreased 0.5%, and the mainland-focused CSI 300 Index increased 0.6% as investors reacted to a strong rally in AI- and semiconductor-related stocks in overnight trading in New York. 

The S&P 500 Index gained 1.5%, and the tech-focused Nasdaq Composite advanced 2.1% as investors returned to exposures to hyperscalers, advanced chip designers, and electronic component makers. 

The surge on Wall Street spilled over to Asia, and benchmark indexes in South Korea edged up 0.4%, in Japan gained 0.4%, and in Australia advanced a fraction. 

However, those market gains were fleeting, and the indexes traded below the flatline as the session approached the closing. 

Domestically, investors are awaiting the release of international trade data and inflation updates, as policymakers debate additional steps to stabilize markets. 

China Indexes and Stocks 

The Hang Seng Index decreased 0.5% to 25,870.80, and the mainland-focused CSI 300 Index gained 0.6% to 4,569.39. 

SMIC gained 1.8% to HK $63.30, CXMT Corp. dropped 1.5% to ¥54.15, Zhongji Innolight Co. Ltd. soared 13% to HK $1,138.0, and Eoptolink Technology fell 0.5% to ¥394.08.

Alibaba Group extended 2-day gains to 5% after the e-commerce company released its advanced open-source artificial intelligence model for developers. 

Tencent Holdings decreased 0.9% to HK $485.80, and Meituan Ltd. fell 1% to HK $92.45.  

China Indexes Lacked Momentum Ahead of International Trade and Inflation Updates

Stocks in China lacked direction on Tuesday as investors focused on unresolved U.S.-China trade tensions and cooling energy prices in international markets. 

The Hang Seng Index decreased 0.5%, and the mainland-focused CSI 300 Index increased 0.6% as investors reacted to a strong rally in AI- and semiconductor-related stocks in overnight trading in New York. 

The S&P 500 Index gained 1.5%, and the tech-focused Nasdaq Composite advanced 2.1% as investors returned to exposures to hyperscalers, advanced chip designers, and electronic component makers. 

The surge on Wall Street spilled over to Asia, and benchmark indexes in South Korea edged up 0.4%, in Japan gained 0.4%, and in Australia advanced a fraction. 

However, those market gains were fleeting, and the indexes traded below the flatline as the session approached the closing. 

Domestically, investors are awaiting the release of international trade data and inflation updates, as policymakers debate additional steps to stabilize markets. 

China Indexes and Stocks 

The Hang Seng Index decreased 0.5% to 25,870.80, and the mainland-focused CSI 300 Index gained 0.6% to 4,569.39. 

SMIC gained 1.8% to HK $63.30, CXMT Corp. dropped 1.5% to ¥54.15, Zhongji Innolight Co. Ltd. soared 13% to HK $1,138.0, and Eoptolink Technology fell 0.5% to ¥394.08.

Alibaba Group extended 2-day gains to 5% after the e-commerce company released its advanced open-source artificial intelligence model for developers. 

Tencent Holdings decreased 0.9% to HK $485.80, and Meituan Ltd. fell 1% to HK $92.45.  

Wall Street Indexes Hovered Near Record Highs Amid Earnings Optimism

U.S. stocks advanced in Monday's trading as investors prepared for a busy week of earnings and labor market updates. 

The S&P 500 Index increased 0.5%, and the tech-heavy Nasdaq Composite advanced 0.6% ahead of key earnings later in the week. 

This week, about 150 companies are slated to release their quarterly results, including Costco Wholesale, Walt Disney, McDonald's, Kraft Heinz, and Advanced Micro Devices. 

Last week, semiconductor stocks whiplashed after Microsoft and Amazon reiterated their commitment to invest in artificial intelligence infrastructure, but Meta Platforms and Apple dropped between 7% and 10% following their quarterly results. 

Global markets edged higher amid renewed interest in high-flying AI-related stocks after positive earnings from Amazon and Microsoft and semiconductor-related IPO listings in Hong Kong. 

Rate decisions from major central banks kept expectations alive for higher rates later in the year.

On the economic front, investors are awaiting Friday's release of July's nonfarm payrolls and weekly jobless data on Thursday. 

The U.S. economy is expected to add 80,000 net new jobs in July, up from 57,000 jobs in the previous month, according to an informal survey conducted by Ticker.com of nine leading economists. 

The West Texas Intermediate crude oil price decreased 5% to $79.77 a barrel after the Trump administration signaled its willingness to resume diplomatic talks with their Iranian counterparts and halted fourteen days of military strikes.  

Despite the suspension of hostilities, tensions in the Middle East remained high as Houthi rebels vowed to continue their attacks on Saudi shipments in Red Sea and Israel kept up its assault in southern Lebanon. 

Over the last six months, the U.S. president has at least 42 times said that the Iran war will be over in a week and that Iran has lost its entire air force, navy, and striking capabilities. 

Across the Atlantic, benchmark indexes in Germany advanced 1.5%, in France rose 1.4%, but in the U.K. decreased 0.1%. 

The sharp decrease in crude oil and natural prices lifted airlines and travel-related stocks and dragged down energy explorers. 

U.S. Movers 

Alibaba jumped 4.5% to $127.78 after the company released its latest version of the AI model, Qwen Intelligence 3.8-Max, allowing developers to operate on their local machines. 

Astrazeneca PLC dropped 5.6% to $160.04 over a report that the company is in preliminary merger talks with its U.S. rival Bristol Meyers. 

The potential agreement was first reported by the London-based Financial Times, reporting that the combined company with a market cap of $400 billion could face a fewer regulatory headwinds. 

Wall Street Indexes Hovered Near Record Highs Amid Earnings Optimism

U.S. stocks advanced in Monday's trading as investors prepared for a busy week of earnings and labor market updates. 

The S&P 500 Index increased 0.5%, and the tech-heavy Nasdaq Composite advanced 0.6% ahead of key earnings later in the week. 

This week, about 150 companies are slated to release their quarterly results, including Costco Wholesale, Walt Disney, McDonald's, Kraft Heinz, and Advanced Micro Devices. 

Last week, semiconductor stocks whiplashed after Microsoft and Amazon reiterated their commitment to invest in artificial intelligence infrastructure, but Meta Platforms and Apple dropped between 7% and 10% following their quarterly results. 

Global markets edged higher amid renewed interest in high-flying AI-related stocks after positive earnings from Amazon and Microsoft and semiconductor-related IPO listings in Hong Kong. 

Rate decisions from major central banks kept expectations alive for higher rates later in the year.

On the economic front, investors are awaiting Friday's release of July's nonfarm payrolls and weekly jobless data on Thursday. 

The U.S. economy is expected to add 80,000 net new jobs in July, up from 57,000 jobs in the previous month, according to an informal survey conducted by Ticker.com of nine leading economists. 

The West Texas Intermediate crude oil price decreased 5% to $79.77 a barrel after the Trump administration signaled its willingness to resume diplomatic talks with their Iranian counterparts and halted fourteen days of military strikes.  

Despite the suspension of hostilities, tensions in the Middle East remained high as Houthi rebels vowed to continue their attacks on Saudi shipments in Red Sea and Israel kept up its assault in southern Lebanon. 

Over the last six months, the U.S. president has at least 42 times said that the Iran war will be over in a week and that Iran has lost its entire air force, navy, and striking capabilities. 

Across the Atlantic, benchmark indexes in Germany advanced 1.5%, in France rose 1.4%, but in the U.K. decreased 0.1%. 

The sharp decrease in crude oil and natural prices lifted airlines and travel-related stocks and dragged down energy explorers. 

U.S. Movers 

Alibaba jumped 4.5% to $127.78 after the company released its latest version of the AI model, Qwen Intelligence 3.8-Max, allowing developers to operate on their local machines. 

Astrazeneca PLC dropped 5.6% to $160.04 over a report that the company is in preliminary merger talks with its U.S. rival Bristol Meyers. 

The potential agreement was first reported by the London-based Financial Times, reporting that the combined company with a market cap of $400 billion could face a fewer regulatory headwinds. 

Yen Extended 3-Day Advance to 5% after Japan and U.S. Treasury Confirmed Joint Intervention

Japan's benchmark indexes fell sharply on Monday following a joint currency market intervention to prop up the faltering yen. 

The Nikkei 225 Stock Average plunged as much as 2%, the broader TOPIX declined as much as 3%, and the yen rebounded to 156.34 against the U.S. dollar. 

The yen rebounded 5% over three trading sessions after the Finance Ministry confirmed it carried out a yen-buying operation with the U.S. Treasury after the currency dropped to four-decade lows.  

Japanese authorities signaled their willingness to conduct additional coordinated interventions if needed. 

Last month, the yen dropped to a four-decade low of 163.56 against the U.S. dollar, amid mounting fiscal deficit concerns, persistent interest rate differential, and mounting pressures from elevated energy costs. 

The yen is likely to resume its slide over the months if the U.S. Federal Reserve lifts its rates to combat intensifying and deepening inflationary pressures. 

Japan Indexes and Stocks 

The Nikkei 225 Stock Average fell 0.9% to 63,795.53, and the broader TOPIX decreased 1% to 3,962.71.

Fanuc plunged 15% to ¥6,064.0 after the factory automation company reported solid financial results in the second quarter, but the company's sales outlook fell short of investor expectations. 

Net sales increased 17% to 231.1 trillion yen from 196.3 trillion yen, net income advanced 34.7% to 51 billion yen from 37.8 billion yen, and earnings per share rose to 54.63 yen from 40.56 a year ago. 

Fanuc revised its full-year revenue to rise 10.5% to 948.1 trillion yen, net income to advance 18.9% to 198 trillion yen, and earnings per share to 212.18. 

Fanuc stock fell sharply after the company's weak sales and earnings growth guidance as the company battled a weakening domestic sales outlook, rising cost pressures, and intensifying global competitive pressures from China.

Yen Extended 3-Day Advance to 5% after Japan and U.S. Treasury Confirmed Joint Intervention

Japan's benchmark indexes fell sharply on Monday following a joint currency market intervention to prop up the faltering yen. 

The Nikkei 225 Stock Average plunged as much as 2%, the broader TOPIX declined as much as 3%, and the yen rebounded to 156.34 against the U.S. dollar. 

The yen rebounded 5% over three trading sessions after the Finance Ministry confirmed it carried out a yen-buying operation with the U.S. Treasury after the currency dropped to four-decade lows.  

Japanese authorities signaled their willingness to conduct additional coordinated interventions if needed. 

Last month, the yen dropped to a four-decade low of 163.56 against the U.S. dollar, amid mounting fiscal deficit concerns, persistent interest rate differential, and mounting pressures from elevated energy costs. 

The yen is likely to resume its slide over the months if the U.S. Federal Reserve lifts its rates to combat intensifying and deepening inflationary pressures. 

Japan Indexes and Stocks 

The Nikkei 225 Stock Average fell 0.9% to 63,795.53, and the broader TOPIX decreased 1% to 3,962.71.

Fanuc plunged 15% to ¥6,064.0 after the factory automation company reported solid financial results in the second quarter, but the company's sales outlook fell short of investor expectations. 

Net sales increased 17% to 231.1 trillion yen from 196.3 trillion yen, net income advanced 34.7% to 51 billion yen from 37.8 billion yen, and earnings per share rose to 54.63 yen from 40.56 a year ago. 

Fanuc revised its full-year revenue to rise 10.5% to 948.1 trillion yen, net income to advance 18.9% to 198 trillion yen, and earnings per share to 212.18. 

Fanuc stock fell sharply after the company's weak sales and earnings growth guidance as the company battled a weakening domestic sales outlook, rising cost pressures, and intensifying global competitive pressures from China.

China's Slowing Growth Momentum Spurs Policymakers and PBOC in Action

Stocks in China struggled on Monday amid growing evidence of a macroeconomic slowdown, and investors looked to policymakers for additional support. 

The Hang Seng Index edged up 0.1%, and the mainland-focused CSI 300 Index decreased 0.7% as investors reacted to the latest update on the manufacturing survey. 

The RatingDog China Manufacturing PMI eased to a four-month low of 50.9 in July from 51.7 in June, said the S&P Global. 

The private survey indicated a slowdown in new orders growth, focusing more on export-driven medium- and large-sized companies. 

New orders advanced for the 14th consecutive month, and input price inflation eased for the third consecutive month; however, output prices held steady for the sixth consecutive month. 

However, business sentiment improved at export-driven companies supported by expectations of stronger demand, new product development, and enlarged production capacity. 

On Friday, the National Bureau of Statistics said the official manufacturing PMI in July eased to 49.2 from 50.3 in June. 

China's official gauge of factory activities, which has a larger share of state-controlled large enterprises, dropped into contraction and ended a four-month growth streak.

Weakness in domestic demand and new order growth raised expectations for additional policy support from Beijing. 

Separately, the People's Bank of China reiterated its commitment to supporting the economy, maintaining ample liquidity, and urging financial institutions to ensure balanced credit growth.     

China Indexes and Stocks 

The Hang Seng Index edged up 0.1% to 25,900.24, and the mainland-focused CSI 300 Index fell 0.7% to 4,554.62. 

Financial stocks led decliners in Hong Kong and Shanghai trading on Monday. 

ICBC decreased 1% to HK $7.44, and the Agricultural Bank of China declined 2.5% to HK $6.16. China Construction Bank also eased 1% to HK $9.13.

CXMT advanced 2.7% to ¥55.43, SMIC fell 4.8% to ¥118.10, Eoptolink Technology increased 0.6% to ¥398.50, and Zhongji Innolight gained 2.7% to ¥926.04.  

China's Slowing Growth Momentum Spurs Policymakers and PBoC In Action

Stocks in China struggled on Monday amid growing evidence of a macroeconomic slowdown, and investors looked to policymakers for additional support. 

The Hang Seng Index edged up 0.1%, and the mainland-focused CSI 300 Index decreased 0.7% as investors reacted to the latest update on the manufacturing survey. 

The RatingDog China Manufacturing PMI eased to a four-month low of 50.9 in July from 51.7 in June, said the S&P Global. 

The private survey indicated a slowdown in new orders growth, focusing more on export-driven medium- and large-sized companies. 

New orders advanced for the 14th consecutive month, and input price inflation eased for the third consecutive month; however, output prices held steady for the sixth consecutive month. 

However, business sentiment improved at export-driven companies supported by expectations of stronger demand, new product development, and enlarged production capacity. 

On Friday, the National Bureau of Statistics said the official manufacturing PMI in July eased to 49.2 from 50.3 in June. 

China's official gauge of factory activities, which has a larger share of state-controlled large enterprises, dropped into contraction and ended a four-month growth streak.

Weakness in domestic demand and new order growth raised expectations for additional policy support from Beijing. 

Separately, the People's Bank of China reiterated its commitment to supporting the economy, maintaining ample liquidity, and urging financial institutions to ensure balanced credit growth.     

China Indexes and Stocks 

The Hang Seng Index edged up 0.1% to 25,900.24, and the mainland-focused CSI 300 Index fell 0.7% to 4,554.62. 

Financial stocks led decliners in Hong Kong and Shanghai trading on Monday. 

ICBC decreased 1% to HK $7.44, and the Agricultural Bank of China declined 2.5% to HK $6.16. China Construction Bank also eased 1% to HK $9.13.

CXMT advanced 2.7% to ¥55.43, SMIC fell 4.8% to ¥118.10, Eoptolink Technology increased 0.6% to ¥398.50, and Zhongji Innolight gained 2.7% to ¥926.04.  

Bank of Japan Held Rates Steady, Tokyo Region Inflation Accelerated In July

Stocks in Japan staged a sharp rally on Friday, and investors reviewed the rate decisions and inflation update. 

The Nikkei 225 Stock Average soared as much as 5%, and the broader TOPIX increased nearly 2%, and the Japanese yen strengthened more than 3% to 160.63 against the U.S. dollar. 

The Bank of Japan left its short-term policy rate at 1% at the end of its policy meeting on Friday, following its previous 25 basis point hike in June.  

In the 8-1 rate decision, policymakers warned for the first time that underlying inflation could exceed the 2% target due to higher import costs of energy and rising wages. 

In its quarterly outlook, the BoJ lifted its 2026 real GDP growth projection to 0.6% from the previous estimate of 0.5% amid strong exports and resilient domestic demand. 

In addition, the central bank lowered its fiscal year 2026 inflation estimate to 2.5% from 2.8%, reflecting continued support from the government for energy bills for residents. 

The rate decision accompanied a suspected market intervention to bolster the currency, which has been hovering at a four-decade low for weeks. 

On the economic front, overall inflation in the Tokyo area accelerated to 2.0% in July from 1.7% in June, marking the highest level in seven months. 

Core consumer prices, which excludes volatile food prices, accelerated to an annual 1.9% in July from a 1.6% rise in the previous month, signaling broadening price pressures stemming from the ongoing tensions in the Middle East.  

Meanwhile, core-core inflation, which excludes food and energy prices, advanced to 2.0% in the month from 1.9% in June, according to the data released by the Statistics Bureau of Japan. 

Japan Indexes and Stocks 

The Nikkei 225 Stock Average increased 4.1% to 64,422.77, and the broader TOPIX advanced 1.5% to 4,011.79. 

AI- and semiconductor-linked stocks soared following a sharp rebound in tech stocks in overnight trading in New York. 

Microsoft and Amazon reported better-than-expected quarterly results and reiterated their commitment to continue their investments in artificial intelligence infrastructure. 

Tokyo Electron Media increased 5.7% to ¥55,190.0, Advantest Corp. rose 15% to ¥32,220.0, and soared 12.7% to ¥37,980.0. 

Bank of Japan Held Rates Steady, Tokyo Region Inflation Accelerated In July

Stocks in Japan staged a sharp rally on Friday, and investors reviewed the rate decisions and inflation update. 

The Nikkei 225 Stock Average soared as much as 5%, and the broader TOPIX increased nearly 2%, and the Japanese yen strengthened more than 3% to 160.63 against the U.S. dollar. 

The Bank of Japan left its short-term policy rate at 1% at the end of its policy meeting on Friday, following its previous 25 basis point hike in June.  

In the 8-1 rate decision, policymakers warned for the first time that underlying inflation could exceed the 2% target due to higher import costs of energy and rising wages. 

In its quarterly outlook, the BoJ lifted its 2026 real GDP growth projection to 0.6% from the previous estimate of 0.5% amid strong exports and resilient domestic demand. 

In addition, the central bank lowered its fiscal year 2026 inflation estimate to 2.5% from 2.8%, reflecting continued support from the government for energy bills for residents. 

The rate decision accompanied a suspected market intervention to bolster the currency, which has been hovering at a four-decade low for weeks. 

On the economic front, overall inflation in the Tokyo area accelerated to 2.0% in July from 1.7% in June, marking the highest level in seven months. 

Core consumer prices, which excludes volatile food prices, accelerated to an annual 1.9% in July from a 1.6% rise in the previous month, signaling broadening price pressures stemming from the ongoing tensions in the Middle East.  

Meanwhile, core-core inflation, which excludes food and energy prices, advanced to 2.0% in the month from 1.9% in June, according to the data released by the Statistics Bureau of Japan. 

Japan Indexes and Stocks 

The Nikkei 225 Stock Average increased 4.1% to 64,422.77, and the broader TOPIX advanced 1.5% to 4,011.79. 

AI- and semiconductor-linked stocks soared following a sharp rebound in tech stocks in overnight trading in New York. 

Microsoft and Amazon reported better-than-expected quarterly results and reiterated their commitment to continue their investments in artificial intelligence infrastructure. 

Tokyo Electron Media increased 5.7% to ¥55,190.0, Advantest Corp. rose 15% to ¥32,220.0, and soared 12.7% to ¥37,980.0. 

China's Politburo Provided Verbal Support to Capital Markets, Business Activities Growth Weakened In July

China's benchmark indexes advanced on Friday, driven by a rise in AI-related stocks. 

The Hang Seng decreased 0.1%, and the mainland-focused CI 300 Index increased 1.2% as investors reviewed the latest comments from the Politburo. 

The Politburo, a meeting of top policymakers, signaled its commitment to provide timely support for the economy but provided few details.  

Investors held out for more policy support after the initial set of coordinated actions between the central bank and state-controlled investment funds failed to revive market sentiment.

China's annual economic growth slowed down to 4.3% in the second quarter from 5.0% in the first quarter, and the latest business survey confirmed slowing activities in both manufacturing and services sectors. 

The NBS Manufacturing PMI unexpectedly declined to 49.2 in July from 50.3 in the previous month. said the National Bureau of Statistics. 

The factory activity growth contracted for the first time since February amid persistent weakness in domestic demand and rising costs for export orders. 

China's non-manufacturing PMI eased to 49.0 in July from 50.2 in June, pointing to a renewed contraction after two months of modest expansion, the statistical agency said in a separate report. 

The weak readings reinforced concerns over slowing growth, and most economists are holding out for the official GDP growth to ease below 3% in the second half of the year.  

China's GDP growth estimates are widely estimated, and many private domestic and international economists estimate Chinese economic growth may be close to 1%, sharply below the official estimate of between 4.5% and 5.0%. 

China Indexes and Stocks 

The Hang Seng Index decreased 0.1% to 25,830.69, and the mainland-focused CSI 300 Index advanced 1.2% to 4,605.92. 

For the week, the Hang Seng Index rose 3.4%, and the mainland-focused CSI 300 Index decreased 1.2%. 

Semiconductor- and AI-related stocks shot up sharply, tracking gains in tech stocks in overnight trading in New York after Microsoft reiterated its commitment to continue investing in artificial intelligence infrastructure. 

Cambricon Technologies Corp. soared 8.2% to ¥1,128.02, Zhongji Innolight advanced 8.2% to ¥934.25, SMIC edged up 3.2% to HK $63.90, and Eoptolink Technology advanced 10.4% to ¥409.50.