Published by Global Banking & Finance Review®
Posted on January 16, 2026
4 min readLast updated: January 19, 2026
Add as preferred source on GoogleAsian stocks rise on AI optimism; dollar strengthens amid Fed outlook. TSMC's performance boosts tech stocks, while yen gains on intervention talk.
By Rae Wee
SINGAPORE, Jan 16 (Reuters) - Asian stocks advanced on Friday as the artificial intelligence boom regained momentum, while the dollar held near a six-week high after upbeat U.S. economic data left traders trimming bets on Federal Reserve rate cuts.
Oil prices fell alongside safe-havens gold and silver after U.S. President Donald Trump adopted a wait-and-see posture towards the unrest in Iran, having earlier threatened intervention.
MSCI's broadest index of Asia-Pacific shares outside Japan scaled a record high of 761.53 points, as stellar results from Taiwanese chipmaker TSMC breathed new life into the AI trade.
Technology-heavy indexes in Taiwan and South Korea also notched all-time peaks.
The U.S. and Taiwan clinched a trade deal on Thursday that cuts tariffs on many of the semiconductor powerhouse's exports, directs new investments towards the U.S. technology industry and risks infuriating China.
Overnight, gains in technology and financial stocks sent Wall Street higher, with Nasdaq futures up 0.4% in the Asian session. S&P 500 futures similarly tacked on 0.3%.
"We know there's lingering doubts about the spend around capex and AI more broadly, and I guess with the TSMC report yesterday being pretty solid and sounding optimistic, it certainly provided a much needed shot in the arm for those AI names which have been struggling on Wall Street in recent months," said Tony Sycamore, a market analyst at IG.
"I wouldn't say it galvanised or basically shot them higher, but it certainly provided some much needed reassurance there, that everything remains on track."
Japan's Nikkei fell 0.14%, weighed down in part by a recovery in the yen, which has retreated from an 18-month low.
EUROSTOXX 50 futures fell 0.3% while FTSE futures eased 0.06%, after European shares scaled a record high on Thursday.
In China, stocks edged lower and were set to snap a four-week winning streak, as regulators tightened margin financing rules. The CSI300 blue-chip index fell 0.34%.
TRADERS ON YEN INTERVENTION WATCH
The yen stole the spotlight in the currency market after Japanese Finance Minister Satsuki Katayama said on Friday Tokyo would not rule out any options to counter excessive foreign exchange volatility, including coordinated intervention with the U.S.
Her comments lifted the yen slightly, with the currency extending gains after a Reuters report that some Bank of Japan policymakers see scope to raise interest rates sooner than markets expect, with April a distinct possibility.
It was last 0.2% stronger at 158.36 per dollar.
The yen has been sold off on the prospect of a snap election in Japan as early as next month, which investors bet could pave the way for expanded fiscal stimulus from Prime Minister Sanae Takaichi.
"For Takaichi, the snap poll offers the chance of a stronger mandate at home and abroad - but failure would likely spell a swift end to her premiership," said Daniel Hurley, portfolio specialist at T. Rowe Price.
Elsewhere, the dollar hovered near a six-week high after a slew of upbeat U.S. economic releases including data that showed the number of Americans filing new applications for unemployment benefits unexpectedly fell last week.
The euro languished near a 1-1/2-month low and bought $1.1606, while sterling was little changed at $1.3385.
Against a basket of currencies, the dollar stood at 99.34, not far from Thursday's top of 99.493, its highest since December 2. [FRX/]
"Mounting evidence of stable labour conditions is lowering the odds of an April cut, as fixed income watchers grow increasingly confident that the next benchmark drop will come from Chair Powell's successor in June," said Jose Torres, senior economist at Interactive Brokers.
Markets are now pricing in a 67% chance that the Federal Reserve will stand pat on rates in April, up from 37% a month ago, according to the CME FedWatch tool. Odds for a steady outcome in June have also risen to 37.5%, compared to 17% last month.
In the oil market, prices extended their steep fall in the previous session after Trump's watered-down comments on Iran allayed concerns over potential military action against Tehran and oil supply disruptions.
Brent futures were down 0.19% at $63.64 a barrel, having tumbled more than 4% in the previous session. U.S. crude similarly slipped 0.15% to $59.10 per barrel after a 4.6% fall on Thursday.
Spot gold was down 0.06% at $4,611.49 an ounce. [GOL/]
(Reporting by Rae Wee; Editing by Shri Navaratnam and Jamie Freed)
Artificial intelligence (AI) refers to the simulation of human intelligence in machines programmed to think and learn like humans, often used in various applications including stock trading and financial analysis.
Economic growth is the increase in the production of goods and services in an economy over a period of time, typically measured by the rise in Gross Domestic Product (GDP).
Financial markets are platforms where buyers and sellers engage in the trade of assets such as stocks, bonds, currencies, and derivatives, facilitating the exchange of capital.
Investment is the act of allocating resources, usually money, in order to generate income or profit, often involving the purchase of assets like stocks, bonds, or real estate.
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