Asia report: Tech stocks lift markets as BoJ hikes rates

18th Sep 2026 11:20

(Sharecast News) - Renewed strength in the chip sector lifted stocks in South Korea on Friday, while a weaker yen boosted Tokyo shares after the Bank of Japan hiked interest rates to their highest level in 31 years.

The KOSPI index in Seoul surged 2.7% on the back of strong gains from the likes of Samsung Electronics and SK Hynix, bolstered by a rally in US tech shares the previous evening.

Tokyo's Nikkei 225 also jumped 1.4%, as a weaker yen raised prospects for Japanese exporters. Tech stocks rose, including Advantest, Kioxia Holdings, Tokyo Electron, Ibiden and SoftBank.

Stocks in Hong Kong and mainland China also climbed, but to a lesser extent, with the Hang Seng up 0.6% and the Shanghai Composite up 0.9%. Indices in India and Singapore finished more or less flat.

The big news overnight was the Bank of Japan raising its key interest rate for the second time in three months, pushing borrowing costs to their highest level since 1995. The benchmark interest rate was raised 25 basis points to 1.25%, as expected, though policymakers suggested that more hikes were on the way.

"As for the future conduct of monetary policy, given that underlying CPI inflation has been approaching 2% and financial conditions have been accommodative, the Bank will continue to raise the policy interest rate and adjust the degree of monetary accommodation, in response to developments in economic activity and prices as well as financial conditions," the BoJ said in a statement.

Japanese stocks surged following the decision as the yen weakened, with the dollar rising to JPY156.90 from JPY156.14. Despite the widely expected decision, "the knee-jerk reaction was a swift rise in USDJPY, as two officials dissented", according to Swissquote senior analyst Ipek Ozkardeskaya.

"The market's answer was clear: one hike is not enough; more is needed to bring the BoJ rate somewhere around neutral. So what BoJ Governor Ueda says matters more than the rate hike itself. How Ueda sees inflation risks evolving and how he sees fiscal concerns fitting into this context will be important for the USDJPY's next direction."

Also helping sentiment was a third straight fall in the oil price, with work underway to restore Saudi Arabia's East-West pipeline. The 1,201-kilometre-long pipeline was badly damaged by a strike last week, which raised concerns about extended disruptions to Saudi supplies. Brent crude was down 2.2% at $102.58 a barrel by the close in Asia, after having come close to the $110 mark at the start of the week.