Last week’s Jakota markets:
- Japan’s Nikkei 225 broke above 44,000 with a 4.1% rally as investors bet on increased government spending after PM Ishiba’s resignation, while revised Q2 GDP data showed stronger than expected 2.2% growth
- South Korea’s KOSPI jumped 5.9% to near 3,400 on strong foreign buying and anticipation of government market stimulus, extending its year-to-date gain to 41.5%
- Taiwan’s TAIEX climbed 4% to a record high, powered by robust AI demand and TSMC’s second highest monthly sales on record
- The JAKOTA Blue Chip 150 Index posted a 3.8% advance, driven by semiconductor stocks including SK Hynix’s HBM4 chip production announcement
Japan
Japan’s stock market rallied this week, with the Nikkei 225 advancing 4.1% to surpass 44,000 for the first time. The gains came amid expectations of increased government spending following Prime Minister Shigeru Ishiba’s announcement that he would step down, marking the end of his tenure as a fiscal conservative.
Technology and semiconductor stocks led the advance, buoyed by continued enthusiasm surrounding the AI boom. The sector received additional support from Oracle’s announcement of substantially higher guidance.
Mr. Ishiba’s decision to resign followed significant losses for his Liberal Democratic Party in two general elections over the past year. The party has scheduled an emergency leadership vote for October 4, with investors closely watching whether his successor will pursue more expansionary fiscal policies, potentially including reductions to income and consumption taxes.
While some market participants questioned whether the political uncertainty might prompt the Bank of Japan (BoJ) to delay further monetary tightening, many investors still expect the central bank to raise interest rates later this year if economic and inflation data align with its forecasts. The BoJ is scheduled to announce its next policy decision on September 19, with markets widely expecting officials to hold rates steady as they assess the continuing impact of U.S. tariffs.
Economic data showed Japan’s economy performed better than initially reported in the second quarter of 2025. Revised figures indicated gross domestic product (GDP) expanded at a 2.2% annualised pace, well above the preliminary 1% estimate and following a 0.3% gain in the first quarter. The upward revision reflected stronger than expected consumer spending, supported by government measures designed to offset rising food and energy costs.
South Korea
South Korean stocks climbed this week, with the KOSPI Index gaining 5.9% on strong foreign and institutional buying of financial and blue chip tech shares. Investors positioned for potential government market stimulus measures.
The KOSPI has surged 41.5% year-to-date, the strongest performance among major global indexes, breaking through previous record highs and approaching the 3,400 level.
The recent gains reflect expectations that the Lee Jae Myung administration will advance capital market reforms, including relaxed capital gains tax rules for major shareholders. A weaker U.S. dollar following Federal Reserve rate cuts has also supported the rally. Investor sentiment received an additional boost after Oracle issued upbeat guidance and Taiwan Semiconductor (TSMC) reported strong demand for its chip packaging services.
Finance Minister Koo Yun-cheol said on Friday that the government would provide full policy support to domestic AI and robotics companies as part of efforts to establish the country as a global AI leader.
Taiwan
Taiwan’s stock market also posted gains this week, with the TAIEX index rising 4% on strength in tech shares. Continued enthusiasm around AI demand and optimism over a potential Federal Reserve rate cut supported the advance. Like other Jakota markets, the TAIEX reached a record high.
Taiwan Semiconductor (TSMC) reported its second highest monthly sales on record in August, with revenue jumping more than 33% from the previous year on robust demand for AI applications.
Taiwan’s exports hit a record in August, climbing more than 34% year-over-year and far exceeding forecasts.
JAKOTA Blue Chip 150 Index
The JAKOTA Blue Chip 150 Index advanced 3.8% this week, with 111 of the 150 constituent stocks posting gains.
SK Square, a Korean investment company and the largest single shareholder of SK Hynix, emerged as the top performer on the index with shares jumping 29.1%. The rally was largely driven by positive developments at SK Hynix – which ranked third among the best performers on the index this week – and broader optimism in the semiconductor sector.
SK Hynix shares surged following the company’s announcement that it is prepared for mass production of its next generation HBM4 high bandwidth memory chip. The HBM4 chip doubles bandwidth and improves power efficiency by 40% compared with previous iterations, strengthening SK Hynix’s position in the AI memory market. The gains were further supported by the company’s second quarter 2025 results, which showed record revenue and operating profits driven by robust sales of AI related products.
Pan Pacific International Holdings, one of Japan’s top retailers, was the worst performer among JAKOTA Blue Chip 150 constituents this week despite the absence of company specific negative news. The decline can be attributed to a combination of technical indicators and concerns that the stock may be overvalued.
