Asia-Pacific Stocks Hover Near Highs; Kospi Hits Record Closing High; Samsung to Face Longest-Ever Strike.

Tradingkey - Markets continue to monitor details of the meeting between the Chinese and U.S. heads of state, as major Asia-Pacific stock markets hover at high levels. U.S. inflation in April rose to 3.8%, a near three-year high, weighing on U.S. semiconductor stocks; Samsung may face the longest strike crisis in its history. This pressured Japanese and South Korean stocks in early trading, which later recovered from volatility to close higher.

U.S. President Donald Trump will arrive in Beijing on Wednesday evening. According to sources close to the matter, the summit between the two heads of state will discuss topics such as Iran, artificial intelligence, nuclear weapons, and rare earths.

In addition, the business leaders in this delegation to China cover multiple sectors including technology, finance, aviation, and agriculture. These include Tesla ( TSLA) CEO Elon Musk, Apple ( AAPL) CEO Tim Cook, as well as the heads of semiconductor companies such as Qualcomm ( QCOM) and Micron ( MU ). In the aviation sector, there is Boeing ( BA) CEO Kelly Ortberg, and the financial sector includes CEOs from Wall Street giants such as Citigroup ( C ), Goldman Sachs ( GS ), and Blackstone Group ( BX ). Notably, NVIDIA ( NVDA) CEO Jensen Huang joined at the last minute and boarded Trump's private plane in Alaska. Previously, Jensen Huang was not included in the list of business representatives for the delegation, which drew outside attention.

Regarding Asia-Pacific stock markets, South Korea's KOSPI index closed up 2.63% at 7,844.01 points, setting a new closing high, after dropping as low as 7,402.36 points during the session.

Among heavyweight stocks, Samsung Electronics' share price was impacted by the strike wave, falling more than 6% at one point in early trading before fluctuating higher to turn positive, with the afternoon share price climbing slightly to close up 1.79% at 284,000 won. SK Hynix was less affected, opening slightly lower by over 2% in early trading before trending stronger to close up 8.31% at 1,987,500 won, reaching an intraday high of 1,990,000 won to set another all-time high.

On the news front, Samsung union representatives stated that the company did not respond to any union demands and announced the failure of negotiations to reporters. The union threatened to launch an 18-day full-scale strike starting May 21, in which more than 50,000 workers may participate. The core disagreement lies in the bonus distribution scheme—the union demands that 15% of operating profit be used for bonuses and the cap be abolished, while Samsung only proposed a 10% plan. The strike could lead to delays in customer shipments, further increases in chip prices, and benefit competitors such as Micron and SK Hynix.

Additionally, South Korean President Lee Jae-myung stated that a post by his advisor regarding the redistribution of profits generated by the AI boom, which sparked heated discussion, was originally intended to open a broader public debate on how to utilize potential windfall tax wealth. Lee posted that the relevant remarks by his policy chief Kim Yong-beom were essentially "exploring the feasibility of a plan to distribute excess national tax revenue resulting from excess profits in the AI sector to the general public as a 'citizen's dividend'." He also emphasized that the relevant remarks never implied using the companies' own profits to fund the payment of such dividends.

The Nikkei 225 index closed up 0.84% at 63,272.11 points. Among heavyweight stocks, Sony rose 5.63% and Toyota Motor rose 3.45%; on the decline, Hitachi fell 2.18% and Advantest fell 1.55%. SoftBank finished flat.

As rising energy prices exacerbated inflationary pressures, the 20-year Japanese government bond yield broke through its January high to reach its highest level since 1997. The yield rose 5 basis points to 3.495%, exceeding the previous high of 3.46% reached on January 20. Yields on 10-year and 30-year government bonds also rose by at least 5 basis points each to 2.6% and 3.86%, respectively.

According to a latest estimate from the OECD, the Bank of Japan's benchmark interest rate is expected to reach 2% by the end of 2027. The report pointed out that assuming inflation stays around 2%, current interest rates remain near the lower end of the interest rate range that is relatively neutral for the economy. The report also suggested that the Bank of Japan should continue to gradually raise interest rates to prevent the economy from overheating. The Bank of Japan previously estimated that Japan's nominal neutral interest rate is between 1.1% and 2.5%, but also noted that there is significant uncertainty regarding the specific level.

The Taiwan Weighted Index fell 1.25% to 41,374.5 points. TSMC closed down 1.55% at NT$2,220.