Asian stock markets including South Korea and Japan hit consecutive record highs amid U.S. stock market boom

Semiconductor stocks lead gains on expectations of U.S. rate cuts and AI demand

Asian stock markets have been strong for consecutive days. Expectations of U.S. rate cuts and strength in semiconductor and related stocks due to AI demand have driven up technology companies' share prices, leading the market higher.

On the 16th (local time), the MSCI Asia Pacific Index rose 0.7% from the previous day, hitting an all-time high for the first time in about five years. The MSCI Emerging Markets Index also rose 0.7%.

In South Korea, the KOSPI rose 1.24% from the previous trading day, marking a record high for five consecutive trading days. Japan's Nikkei 225 and TOPIX indices also rose 0.3% each, recording all-time highs.

Hong Kong's Hang Seng Index fell slightly by 0.03%, while the Shanghai index showed a slight rise of 0.04%. Taiwan's Taiex index also rose sharply by 1.07%.

The dollar weakened on expectations of Fed rate cuts, while gold and U.S. Treasury prices both strengthened.

Gold closed that day around $3,700 per ounce, continuing its record high rally. This was supported by forecasts that the Fed will implement up to four 0.25%-point rate cuts through January next year.

The dollar fell to its lowest level against all major currencies since July. As U.S. Treasuries rose, the yield on government bonds fell 1 basis point (1bp=0.01%) to 4.03%.

Futures on U.S. stock indices also rose that day ahead of the Fed's rate cuts.

S&P 500 futures rose 0.2%, Nasdaq-100 futures rose 0.4%, and Dow Jones Industrial Average futures were almost unchanged.

As of the 17th local time, a 0.25%-point cut in the Federal Reserve Board's policy rate is widely expected, while some expect a 0.5%-point cut amid a sharp slowdown in the labor market.

The U.S. Court of Appeals that day ruled to prohibit the execution of Trump's removal while Fed Governor Lisa Cook's lawsuit over her dismissal is pending. Also, Trump's economic adviser Steven Myron is expected to join the Fed's Board of Governors after Senate confirmation.

Guest reporter Jeong-ah Kim kja@hankyung.com