Asian stocks gained on January 22, 2025, as President Donald Trump's push to enhance investment in artificial intelligence positively influenced the region's tech firms. Notably, shares in Taiwan and Japan experienced significant increases, following Trump's announcement of a new AI investment initiative involving Softbank Group Corp., OpenAI LLC, and Oracle Corp. U.S. equities also advanced, with the S&P 500 closing up 0.9%. However, stocks in Hong Kong and China opened lower.
According to Vicki Chi, a money manager for Asian equities at Robeco, the Asian technology supply chain has been performing well, and the renewed focus on AI is expected to bolster these stocks further. She noted that consumers will increasingly feel the impact of AI advancements this year.
Despite the positive sentiment surrounding U.S. business restrictions, concerns linger regarding Trump's stance on Chinese tariffs, particularly a proposed 10% levy on China in retaliation for fentanyl exports. Frederic Neumann, chief Asia economist at HSBC, warned that such tariffs could hinder China's exports.
In other market movements, U.S. 10-year Treasury yields rose by one basis point, while the dollar strengthened against all Group-of-10 currencies. Chinese Vice Premier Ding Xuexiang announced plans to increase imports to foster balanced trade during the World Economic Forum in Davos. Meanwhile, President Xi Jinping emphasized cooperation with Russia amid external uncertainties.
The Bank of Japan is expected to consider a 25 basis point interest rate hike at its upcoming policy meeting, contributing to a slight decline in the yen against the dollar. SoftBank Group's shares surged over 9% following Trump's announcement of its involvement in the 'Stargate' AI joint venture, reaching their highest level since July.
In the U.S., Netflix Inc. reported its largest quarterly subscriber gain, driven by major live events and the return of popular series. An ETF tracking AI-related companies hit a three-year high, while small-cap stocks rose amid protectionist expectations. Craig Johnson from Piper Sandler noted a broad market rally last week, driven by favorable inflation data and bank earnings, with further upside anticipated due to Trump's investor-friendly policies.
In commodities, oil prices declined amidst tariff threats, while gold remained near its highest levels since early November, as traders monitor global economic conditions.