{"id":66435,"date":"2026-08-12T21:38:18","date_gmt":"2026-08-13T01:38:18","guid":{"rendered":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/asian-markets-surge-as-cooling-u-s-inflation-sparks-chip-led-rally\/66435\/"},"modified":"2026-08-12T21:38:18","modified_gmt":"2026-08-13T01:38:18","slug":"asian-markets-surge-as-cooling-u-s-inflation-sparks-chip-led-rally","status":"publish","type":"post","link":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/asian-markets-surge-as-cooling-u-s-inflation-sparks-chip-led-rally\/66435\/","title":{"rendered":"Asian Markets Surge as Cooling U.S. Inflation Sparks Chip-Led Rally"},"content":{"rendered":"<h2>Key Takeaways<\/h2>\n<ul>\n<li><strong>South Korea&#39;s KOSPI surged over 4% and Japan&#39;s Nikkei 225 rose 1.8%<\/strong> on Thursday, driven by a massive rally in semiconductor stocks following cooling U.S. inflation data.<\/li>\n<li><strong>U.S. headline CPI moderated to 3.4% in July<\/strong>, fueling market expectations for a Federal Reserve rate cut in September and weakening the U.S. Dollar.<\/li>\n<li><strong>The People&#39;s Bank of China (PBOC) skipped reverse repo injections for a third straight day<\/strong> due to a lack of primary dealer demand, while setting the yuan&#39;s reference rate at <strong>6.7888 per dollar<\/strong>.<\/li>\n<li><strong>Defense giants KAI and Hyundai Rotem signed an MOU<\/strong> to develop long-range air-to-air missiles for the <strong>KF-21 fighter jet<\/strong>, targeting &quot;package-type&quot; export models for global markets.<\/li>\n<\/ul>\n<h2>Regional Markets and Tech Surge<\/h2>\n<p>Asian equity markets opened sharply higher on Thursday as investors reacted to a favorable U.S. inflation report. The <strong>KOSPI<\/strong> (<a href=\"\/stock\/KOSPI\">KOSPI<\/a>) in Seoul led the region, jumping as much as <strong>4.41%<\/strong> to reach <strong>6,869.06<\/strong> in early trading. This rally was spearheaded by heavyweights Samsung Electronics (<a href=\"\/stock\/005930\">005930<\/a>) and SK Hynix (<a href=\"\/stock\/000660\">000660<\/a>), which tracked overnight gains in U.S. artificial intelligence and technology sectors.<\/p>\n<p>In Tokyo, the <strong>Nikkei 225<\/strong> (<a href=\"\/stock\/N225\">N225<\/a>) advanced <strong>1.8%<\/strong>, supported by electronics and semiconductor-related stocks like Tokyo Electron (<a href=\"\/stock\/8035\">8035<\/a>). <em>Market sentiment was bolstered by the U.S. Consumer Price Index (CPI) report<\/em>, which showed inflation moderating to <strong>3.4% year-over-year<\/strong>, down from 3.5% in June. This cooling trend has significantly increased the probability of a <strong>25-basis-point rate cut<\/strong> by the Federal Reserve in September.<\/p>\n<h2>Currency and Central Bank Operations<\/h2>\n<p>The <strong>Euro<\/strong> (<a href=\"\/stock\/EURUSD\">EURUSD<\/a>) advanced against a weakening U.S. Dollar, trading near <strong>1.1530<\/strong> during Asian hours. The &quot;greenback&quot; faced downward pressure as moderating price growth reduced the need for a restrictive monetary policy. Meanwhile, <strong>Japan&#39;s 10-year sovereign bond yield<\/strong> decreased slightly to <strong>2.840%<\/strong>, reflecting a cautious but stable fixed-income environment.<\/p>\n<p>The <strong>People&#39;s Bank of China<\/strong> maintained its neutral liquidity stance, conducting <strong>zero seven-day reverse repos<\/strong> for the third consecutive session. The central bank cited a lack of demand from primary dealers, suggesting that interbank liquidity remains ample. Additionally, the PBOC set the daily yuan reference rate at <strong>6.7888<\/strong>, a move aimed at maintaining currency stability amid broader dollar volatility.<\/p>\n<h2>Strategic Defense and Maritime Developments<\/h2>\n<p>South Korea\u2019s defense sector saw a major strategic alignment as Korea Aerospace Industries (KAI) (<a href=\"\/stock\/047810\">047810<\/a>) and Hyundai Rotem (<a href=\"\/stock\/064350\">064350<\/a>) agreed to cooperate on the <strong>KF-21 Boramae<\/strong> fighter jet program. The partnership focuses on integrating <strong>homegrown long-range air-to-air missiles<\/strong> and developing &quot;package-type&quot; export models that bundle aircraft with advanced weaponry. KAI aims to deliver the first <strong>40 KF-21 units<\/strong> to the South Korean Air Force by 2028.<\/p>\n<p>On the geopolitical front, tensions remained elevated in the Taiwan Strait. <strong>Chinese and Indonesian vessels<\/strong> concluded practical maritime drills east of Taiwan, involving formation maneuvers and refueling. While Jakarta described the exercises as &quot;routine,&quot; <strong>Taiwan&#39;s Mainland Affairs Council<\/strong> condemned the drills as a &quot;provocation&quot; intended to create a false impression of Chinese jurisdiction over the waters.<\/p>\n<h2>Trade and Domestic Policy<\/h2>\n<p>In Japan, Prime Minister <strong>Sanae Takaichi<\/strong> held phone talks with Iranian President <strong>Masoud Pezeshkian<\/strong>, emphasizing that transit through the <strong>Strait of Hormuz<\/strong> must remain free of additional fees. Takaichi expressed deep concern over maritime security in the <strong>Bab el-Mandeb Strait<\/strong>, where Houthi rebels have targeted cargo ships, threatening global energy security.<\/p>\n<p>Domestically, South Korea&#39;s Finance Minister <strong>Koo Yun-cheol<\/strong> announced that the government would soon unveil detailed measures to address <strong>youth unemployment<\/strong>. Despite the overall job market adding 108,000 positions in July, the employment rate for those aged 15 to 29 fell for the <strong>27th consecutive month<\/strong>, prompting a call for &quot;tailored policies&quot; in the manufacturing and construction sectors.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Key Takeaways South Korea&#39;s KOSPI surged over 4% and Japan&#39;s Nikkei 225 rose 1.8% on Thursday, driven by a massive 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