Asian Stocks Strengthen Across the Board. Japan and South Korea Stocks Near Record Highs, US $2 Billion Injection Ignites Quantum Computing Concept Stocks

Tradingkey - On May 22, Asian stock markets strengthened across the board, with Japanese and South Korean markets approaching record highs. A surge in U.S. quantum computing stocks overnight drove significant gains in related Japanese concept stocks; the U.S. government reportedly plans to provide approximately $2 billion to nine quantum computing-related companies through equity investments.

Furthermore, the U.S. and Iran are very close to reaching an agreement, with market sentiment further bolstered by the easing of geopolitical tensions. A senior Iranian official stated that negotiators are very close to a deal and are currently drafting the text.

Nikkei 225 Index Opened higher and continued to climb, closing at 63,338.85 points, up 2.68%. During today's session, it touched a high of 63,432.41 points, nearing its all-time high.

Min Joo Kang, an economist at ING, stated that while Japan's inflation slowdown last month was unexpected, the central bank may still raise interest rates in June. Kang wrote that the cooling of inflation in April was primarily due to measures such as government energy subsidies and a decline in food prices following a high base last year. While weaker CPI data could complicate the Bank of Japan's decision next month, ING noted that policymakers are focused on inflation excluding institutional factors, with core prices expected to remain above 2%. Over the past two months, upstream prices, including producer and import prices, have also risen significantly, which should be reflected in consumer inflation in the coming months. Stronger-than-expected Q1 GDP data and April export figures suggest the economy remains resilient despite energy shocks, providing support for rate hikes.

Regarding sectors, driven by the collective strength of the U.S. quantum computing sector overnight, quantum computing concept stocks in the Japanese market saw widespread gains today. The cross-market sentiment transmission effect was significant, as global investors' expectations for the commercialization of quantum computing technology warmed up, driving related assets in the Asia-Pacific region higher. Within the sector, Fixstars (TSE: 3687) rose 25.48% today, and NF Corp (TSE: 6864) gained 17.42%.

Among heavyweight stocks, SoftBank Group closed up 11.89%, extending yesterday's gains for a two-day surge of 34.09%, primarily benefiting from rumors of OpenAI's planned listing and the overnight surge of Arm Holdings ( ARM) rose sharply.

Vey Sern Ling, Senior Equity Advisor at Julius Baer, told CNBC: "SoftBank's stock price movement basically reflects the performance of its portfolio companies. The continuous surge in Arm's stock price, combined with expectations that OpenAI will file for an IPO in the coming weeks, are both driving the stock price upward."

It is reported that SoftBank is already one of OpenAI's major investors, with cumulative investments exceeding $30 billion. In the fiscal year ending March, the book gain on these investments was approximately $450 billion.

KOSPI Index rose 0.41% to 7,847.72 points, with a cumulative two-day gain of 8.86%, leaving it just 2% away from its all-time high.

UBS significantly raised its target price for the KOSPI Index by 26% from previous levels to 9,200 points and maintained a positive outlook. The bank believes that the breadth of corporate earnings growth has far exceeded market expectations, and it's not just Samsung and SK Hynix leading the way. Excluding Samsung and SK Hynix, the KOSPI's forward P/E ratio is 12x, which represents a reasonable valuation.

Regarding heavyweights, Samsung Electronics closed down 2.34% today at 292,500 won; SK Hynix rose 0.05% to 1.941 million won.

Ricky Seo, an analyst at HSBC Global Research, stated in a report that Samsung Electronics reached an agreement with the labor union regarding bonuses, suspending the planned strike. Seo said, "This should further shift investors' focus toward fundamentals." The analyst expects Samsung to regain leadership in chip products such as HBM4, DDR5, and TLC SSDs. HSBC raised its Q2 operating profit forecast for Samsung by 16% to 870 trillion won, citing stronger data server demand driving chip prices higher. He stated that this forecast represents a 21% increase from the previous quarter and more than a doubling from the same period last year.

TAIEX Index closed up 2.18% today at 42,267.97 points. TSMC rose 1.12% to 2,255 TWD.