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James Hyerczyk
Asian Shares

Asia Pacific shares are trading mostly higher on Thursday, helped by a surge in the technology sector. Investors are primarily following the lead on Wall Street from the Wednesday afternoon session that showed the U.S. indexes supported by higher semiconductor stocks. The same sub-sector is helping to boost shares in Japan and South Korea.

At 07:22 GMT, Japan’s Nikkei 225 Index is trading 21756.55, up 46.98, up 0.22%. South Korea’s KOSPI Index is at 2074.48, down 7.82 or -0.38% and Hong Kong’s Hang Seng Index is at 28596.55, up 72.51 or +0.25%.

China’s Shanghai Index is at 2937.36, up 14.08 or +0.48% and Australia’s S&P/ASX 200 Index is trading 6818.00, up 41.30 or +0.61%.

Semiconductors Post Strong Performance

Like Wall Street on Wednesday, the major Asia indexes were driven higher by a jump in the technology sector. This move was fueled by a strong performance in semiconductor stocks.

The primary focus for investors were semiconductor shares in Japan and South Korea. This comes at a time when Japan is exercising export restrictions on high-tech materials to South Korea that are critical in the production of semiconductors. If the situation remains unresolved, analysts are warning there could be serious consequences to the global semiconductor industry.

Analysts are also saying that companies are holding around two months of inventory. So if the conflict between Tokyo and Seoul extends beyond two months, South Korean chipmakers could see a “disruption” in their supply. The country currently accounts for about 70% of global memory market shares. This could drive up the price of smartphones around the world.

In South Korea, shares of chipmaker SK Hynix rose 2.45% after the company announced a reduction in chip output along with shares of Samsung Electronics, which gained 1.72%. However, shares of LG Chem dropped by more than 4.5%. In Japan, shares of semiconductor test equipment manufacturer Advantest soared more than 19%.

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Australian Shares Boosted by Expectations of Lower Interest Rates

Shares in Australia rose on Thursday after Reserve Bank of Australia Governor Philip Lowe said “it is reasonable to expect an extended period of low interest rates.”

At a speaking engagement in Canberra on “Inflation Targeting and Economic Welfare” Lowe opened the door to cutting official interest rates even further while in effect committing itself to keep them at ultra-low levels for an extended period. Even with the economy’s overall fundamentals strong, Lowe said the RBA was prepared to produce faster growth by taking the official cash rate below its current level of 1 percent.

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