Kospi Jumps 14% as Microsoft, Amazon Quell AI Fears
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- Kospi surged 14% shortly after Friday's open, reversing steep weekly losses, though the index remains set to lose 24% in July — its largest monthly drop since 1997, per the report.
- Microsoft and Amazon posted upbeat earnings and forecasts overnight, easing fears about AI-related capital spending and lifting Nasdaq futures 0.87% and S&P 500 futures 0.29%.
- Yen held at 160.51 per dollar, 0.6% weaker, after suspected coordinated intervention — Japan's yen-buying, South Korea's rare dollar-selling, and U.S. "rate checks" — pulled USD/JPY from near-164 to sub-160 ahead of the BOJ decision.
- Nikkei advanced 5% and MSCI's broadest index of Asia-Pacific shares outside Japan rose 3%, with IG's Fabien Yip calling the AI demand story "sustainable" while Amundi's Ji Young Park warned sentiment remains "fragile."
- Long-end U.S. Treasury yields held near 19-year highs while short-end yields eased, steepening the curve as doubts grow over the Federal Reserve's ability to anchor inflation expectations.
- Oil prices edged higher — Brent up 0.4% to $89.38, U.S. crude up 0.3% to $83.84 — after a drone strike on gas vessels in Egypt's Damietta port raised concerns about Suez Canal navigation; National Australia Bank's Rodrigo Catril noted "energy prices did not panic despite the deterioration in the conflict."
Why it matters: Despite Friday's 14% Kospi surge, the index remains on track for a 24% monthly loss — its worst since 1997 — suggesting the rebound is technical rather than fundamental. South Korean authorities moved to rein in leveraged ETFs that wiped out retail savings, while coordinated currency intervention pulled USD/JPY 4 yen lower in a single session ahead of the BOJ's decision.
