Asia's AI recovery lifts KOSDAQ 5% and gives Nikkei a third straight gain

Japanese and South Korean chip stocks bouncing back points to a view that last week's AI sell-off, driven by the midterm backdrop, went too far, at least for now. The steadier tone in US futures backs that reading despite a CPI print that ran hot. The KOSDAQ's surge shows fast-money and retail investors are positioning again, and those bets could unwind quickly if Nvidia falls short next week. China's lagging performance shows the AI rebound trade is concentrated in the hardware supply chain.

The AI trade in Asia is regaining its footing, with Seoul and Tokyo in the lead; Nvidia's earnings next week will determine whether the recovery has staying power.

Summary:

• Nikkei 225 climbed 0.8% to roughly 60,940 by the midday break, its third straight advance; Topix rose about 0.8%
• SoftBank Group fell about 3% after reporting a quarterly net loss of around ¥1.1 trillion
• KOSPI added about 1.7% to near 5,330; Samsung Electronics gained about 2.4% and SK Hynix roughly 3%
• KOSDAQ advanced about 5%, triggering the year's 38th sidecar
• Hang Seng eased about 0.9% and Shanghai slipped about 0.2%; Nasdaq 100 futures were up about 1%

A broad rebound swept through Asian technology stocks on Wednesday. The KOSDAQ jumped roughly 5% and Japan's Nikkei posted a third consecutive daily rise, as fresh AI-related data and earnings helped restore some confidence after last week's steep losses.

By the midday pause, Tokyo's benchmark Nikkei 225 was 0.8% higher at approximately 60,940, and the wider Topix index added a comparable 0.8%, reaching about 3,925. Sentiment drew support from the Reuters Tankan, which put manufacturers' confidence at its strongest in more than five years on the back of booming chip demand. Overnight AI headlines added to the positive mood. CoreWeave said it anticipates reaching adjusted profitability in the first half of 2028, and the Wall Street Journal reported that OpenAI's quarterly revenue climbed about 50% to $10 billion, even as the company continues to post steep operating losses.

SoftBank Group stood out as a laggard, dropping about 3% after swinging to a quarterly net loss of roughly ¥1.1 trillion. Advancers led decliners on the Nikkei by about two to one. Next week's Nvidia numbers, if strong, could soothe worries about AI and chip earnings and support Japanese AI names, according to a strategist at a Japanese brokerage.

Seoul reversed early weakness. By the afternoon, the KOSPI was trading about 1.7% higher near 5,330, with strength coming from chip and defence shares; Samsung Electronics added about 2.4% and SK Hynix roughly 3%. Among defence names, Korea Aerospace Industries jumped about 7%.

The tech-heavy KOSDAQ saw an even sharper move, rising about 5% to near 700. The move caused program buy orders to be suspended for five minutes — the KOSDAQ's 38th sidecar of the year and its 21st on the buy side — following a more than 6% surge in the KOSDAQ 150.

Greater China was the weak spot. Hong Kong's Hang Seng fell about 0.9% and the Shanghai Composite eased around 0.2%.

Following a down day driven by hotter-than-expected US inflation, index futures turned firmer, with Nasdaq 100 futures about 1% higher and S&P 500 futures up roughly 0.5%.

Attention now centres on Nvidia's results next week, which are likely to set the direction for AI stocks across the region.