Asia Equities Reporter on Chip Rotation and BOJ (with Doug Krisner)

Winnie Sue discusses the rotation from US semiconductor stocks into financials and healthcare, noting South Korea's KOSPI is dragged down by Samsung and SK Hynix. She highlights Japan's AI supply chain beneficiaries like Taiyo Yuden and Murata, and sees a BOJ rate hike as likely given strong wage data and yen weakness. She also notes concern that US mega IPOs could pull capital from Asian markets.

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Winnie Sue 3.5

Asia Equities Reporter on Chip Rotation and BOJ (with Doug Krisner)

dxy

Weak yen near 160 and positive US economic data support dollar strength; BOJ intervention only temporary.

ndx

Broadcom's disappointing outlook and profit-taking in AI chips suggest near-term caution for Nasdaq, though the rotation is into other sectors.

rut

Rotation from semiconductors into financials and healthcare, with Dow at record high, implies small-cap and value rotation benefiting RUT.

US market rotation from semiconductors to financials and healthcare; Broadcom down 13%, Philly Semi Index down 2%, UnitedHealth and Goldman Sachs up 5% each, Dow at record 51,561.

Doug Krisner
Winnie Sue

KOSPI down 5% dragged by Samsung and SK Hynix; Broadcom disappointment triggers profit-taking in AI chips.

These two chip makers account for half of KOSPI's weighting, so moves are amplified.
Winnie Sue

Japan's chip stocks are not under similar pressure; investors are rotating into Japanese AI supply chain names like Taiyo Yuden and Murata (MLCC makers, up 100% in past month).

Japan has essential, dominant AI manufacturers beyond mega-caps like Samsung and TSMC.
Winnie Sue

Japanese banks are rising on BOJ rate hike expectations; trading houses benefit from Warren Buffett's favor.

Japan offers diverse market offerings beyond AI.
Japan labor cash earnings up 3.5% annual, real cash earnings up 1.9%, both above forecasts.

Doug Krisner
Winnie Sue

BOJ likely to discuss a 25bp hike at upcoming meeting, possibly another later this year; upside price risks outweigh economic impact; weak yen near 160 supports hike.

Wage data is supportive; officials see price pressure as key factor.
Winnie Sue

US mega IPOs (SpaceX, Anthropic, OpenAI) could generate $60B in additional AI capex, benefiting Asian suppliers; but there is concern capital may flow out of South Korea into these IPOs.

Strategist at IG International estimated the $60B figure; tie-ups like SpaceX and MediaTek support Asian names.

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