Morning Highlights: Asian markets soared amid optimism surrounding AI, while the yen gave up its gains

Asian stock markets posted their biggest intraday gains in nearly four months, thanks to strong earnings reports from Microsoft and Amazon, which confirmed robust demand for artificial intelligence technology. The yen weakened by nearly 1% after the Bank of Japan kept its interest rate unchanged. Meanwhile, Tesla may spin off its China business to facilitate a merger with SpaceX. Read about these and other topics in our roundup of key events as of the morning of July 31.

Asian stock markets posted their biggest one-day gain in nearly four months, driven by a rally in chipmakers following strong results from Microsoft and Amazon, which confirmed robust demand for artificial intelligence technology, according to Bloomberg. The MSCI Asia Pacific Index rose more than 4%, while South Korea’s Kospi soared a record 17%, fully recouping its three-day decline. Shares of Samsung Electronics and SK Hynix rose more than 25%, while the Taiwanese market gained over 7%.

The markets received additional support from measures taken by South Korean authorities to reduce volatility, plans to invest about $13.9 billion in AI development, and signs that the sell-off triggered by the unwinding of highly leveraged trades is coming to an end, the agency notes. Investors expect that large-scale investments in AI by major technology companies will continue to support corporate earnings growth and demand for semiconductors.

The yen weakened by nearly 1% after the Bank of Japan, as expected, kept its interest rate unchanged, according to Bloomberg. Investors are now focused on the press conference by Bank of Japan Governor Kazuo Ueda, from which the market expects signals regarding the future course of monetary policy.

The day before, the yen jumped by more than 3% amid speculation of currency intervention by Japan with U.S. support, but subsequently lost a significant portion of its gains. Authorities did not confirm the intervention but stated their readiness to respond promptly to excessive exchange rate fluctuations.

Anthropic, the world’s most valuable AI startup, reported that during a review of 141,000 tests, it discovered three instances in which its Claude models gained access to the internet and compromised the infrastructure of third-party organizations, according to Bloomberg. The incidents occurred over the past few months, with the first taking place in April during cybersecurity tests due to a configuration error in the environment, which was supposed to be isolated but actually had access to the network.

The company stated that neither Anthropic nor the affected organizations had detected any breaches. The incidents involved the Opus 4.7 and Mythos 5 models, as well as an internal research model lacking standard security measures. Following the incident, Anthropic pledged to strengthen controls over its testing environments.

Tesla’s management has been instructed to prepare for a possible spin-off of its Chinese business amid discussions about a potential merger with SpaceX, The Wall Street Journal has learned. According to the publication’s sources, options to spin off, sell, or close the division are being considered, but a final decision has not yet been made.

The Shanghai Gigafactory remains Tesla's largest plant and produces more than half of the company's vehicles. Analysts note that regulatory restrictions could be the main obstacle to a potential deal, especially in China, where SpaceX's ties to the U.S. government raise national security concerns.

— Japan's broad-based Topix index rose 1.5%, while the Nikkei 225 rose 4%.

— Hong Kong's Hang Seng Index fell 0.3%, while mainland China's CSI 300 Index rose 1.3%.

— In South Korea, the Kospi jumped 17.3%, and the Kosdaq rose 11.7%.

— Australia's S&P/ASX 200 rose by about 0.1%.

— Nasdaq Composite futures rose 1.2%, while S&P 500 and Dow Jones Industrial Average futures gained 0.5%.

This article was AI-translated and verified by a human editor