A 2,000-point surge during the trading session! What happened in the Japanese and Korean stock markets?

Japan, South Korea Stock Markets Experience Collective Surge!

On the afternoon of February 3rd, the Japanese and South Korean stock markets continued their upward trend. The Nikkei 225 index surged by 2,000 points during trading, with an intraday increase of over 4%, reaching a new all-time high; the KOSPI index also rose by over 6%, fully recovering yesterday’s decline.

Semiconductor chip stocks collectively strengthened. As of the time of this report from Securities China, SK Hynix and Samsung Electronics both gained over 8%, Amphenol Testing rose over 7%, Hanmi Semiconductor increased over 6%, and Tokyo Electron rose over 5%.

Japanese Stock Market Rises 2000 Points

On Tuesday, Japan’s stock market soared sharply, with the Nikkei 225 index rising over 4% during trading, and the Topix index up more than 3%. As of this report, the Nikkei 225 index increased by over 2000 points, a 3.86% gain, and the Topix index rose by 3.09%.

On the news front, Japanese Finance Minister Shunichi Katayama stated on February 3rd that Prime Minister Sanae Takaichi did not overly emphasize the benefits of yen depreciation last weekend. This move hints that Katayama is trying to maintain market vigilance regarding government intervention risks.

Katayama said, “Sanae Takaichi simply responded to the yen exchange rate in a textbook manner and did not particularly emphasize the positive aspects of a weak yen.” She added that she agrees with Takaichi’s stance—that yen depreciation has both pros and cons.

She also emphasized that Japan will continue to coordinate closely with the United States, implying that both sides may take joint action in the market. She stated, “Japan and the U.S. have been coordinating, including at my level and among senior officials in monetary policy. We reached a joint statement in September last year, so we will continue to coordinate according to that agreement and take appropriate measures.”

Before making these remarks, Takaichi had said at a campaign rally last week that a weak yen could bring significant opportunities for export-oriented industries, which cooled speculation about her government intervening in the yen exchange rate. The yen again fell back to around 155 on Monday, and early Tuesday hovered around 155.50.

Takaichi also stated that a weak yen benefits Japan’s foreign exchange reserve fund, which the government uses for various purposes, including currency intervention. Later, she posted on X that her intention was to emphasize the need to build an economy capable of resisting exchange rate fluctuations, clearly to dispel outside speculation that she was downplaying the recent yen weakness.

As the February 8th Japanese House of Representatives election approaches, traders are preparing for increased market volatility. They bet that the Liberal Democratic Party led by Takaichi might win a landslide victory. Such a result could pave the way for more aggressive fiscal policies, potentially boosting inflation and putting pressure on the yen and Japanese government bonds.

Korean Stock Market Rises Sharply, Chip Stocks Explode

On February 3rd, the Korean stock market also experienced a major rally. The KOSPI index surged over 6% during trading, with Samsung Electronics rising over 10%, marking its largest gain since March 2020. As of this report from Securities China, the KOSPI increased by 5.87%, Samsung Electronics gained over 9%, SK Hynix rose over 8%, and Hanmi Semiconductor increased over 6%.

Tuesday’s rebound was mainly driven by domestic institutional investors, with foreign investors also net buying stocks. On Tuesday, Vice Finance Minister Lee Hyeong-yi stated that the Korean government has “sufficient policy capacity” to respond to any external uncertainties. He also said that, given the apparent increase in volatility in the currency markets, the government will closely monitor financial market developments.

JPMorgan analysts predict that the Korea Composite Stock Price Index (KOSPI), which broke through 5,000 points in January, could reach 7,500 by 2026. They set a baseline target of 6,000 points for this year and an optimistic target of 7,500.

In a report, JPMorgan said that driven by rising chip prices, leading stocks like Samsung Electronics and SK Hynix have led the gains in the KOSPI, and that chip prices may continue to rise until the end of 2027. JPMorgan believes these two stocks still have 45%-50% upside potential in 2026. They also expect earnings per share in other non-memory industrial sectors to grow by about 20%. Ongoing corporate governance, market, and tax reforms in Korea are expected to serve as additional catalysts.

Another analysis pointed out that the sharp rise in Samsung Electronics and SK Hynix reminds investors that the AI investment boom has shifted to infrastructure, benefiting Korean chip manufacturers at the core of the industry supply chain.

Korea has positioned itself as a key supplier to global industry leaders like Nvidia. Franklin D. Templeton’s global investment portfolio manager Yiping Liao said, “Korea is highly concentrated in specific segments of the tech supply chain. The remarkable rise in SK Hynix and Samsung Electronics stock prices seems to be because we are in an unprecedented storage chip shortage cycle.”

Bank of America Global Research’s Korea research head Simon Woo predicts that the super cycle for storage chips will last until 2027. He stated, “Storage chips have become a critical strategic asset for U.S. tech giants, which is a stark contrast to early cycles when memory was seen merely as a disposable component for PCs and smartphones. This shift has elevated the status of the storage industry.”

Goldman Sachs’ Asia-Pacific stock chief strategist Timothy Moe expects that this year, the semiconductor industry will contribute about 60% of the expected earnings growth for Korean stocks.

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(Source: Securities China)