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Taiwan, Korea, Japan stocks hit record highs

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Fed cut bets fuel EM rally, tech leads the charge

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Taiwan outperforms; Indonesia bond spread widens

By Roushni Nair

Sept 11 (Reuters) - Asian equities surged on Thursday,

with benchmark indexes in Japan, Taiwan and South Korea hitting

record highs, underscoring strong investor optimism ahead of a

widely expected rate cut by the U.S. Federal Reserve next week.

Taiwan's benchmark index rose 1.4% to a record

25,541 points, driven by a 2.5% jump in chipmaker TSMC

. South Korea's Kospi also hit a fresh peak,

gaining nearly 1% earlier in the session.

Both indexes marked record levels for a second consecutive

day, with South Korea on track for an eighth session of gains

and Taiwan rallying for the seventh.

Japan's Nikkei climbed to an all-time high of

44,251.65 points, echoing an overnight rally in Wall Street on

easing bets and encouraging inflation signals.

Singapore's STI benchmark index was flat after

hitting record levels in the previous session, while equities in

Jakarta, Bangkok, and Manila edged

higher.

Investor sentiment was buoyed by a surprise drop in U.S.

producer prices, reinforcing expectations of a Fed rate cut next

week. Traders are now pricing in a 92% chance of a

25-basis-point cut, with an 8% probability of a larger 50 bps

move, according to CME Group's FedWatch tool.

Traders now await the U.S. consumer price data, due later in

the day, to firm up their rate-cut expectations.

Lower U.S. rates typically weaken the dollar and reduce

global financing costs, prompting capital flows into

higher-yielding emerging markets. This dynamic supports EM

currencies, bonds, and equities, particularly in regions with

strong tech exposure and trade surpluses.

Tech sentiment received an additional lift from Oracle Corp ( ORCL )

, whose upbeat cloud outlook added momentum to the

sector, analysts at Bell Potter Research noted.

The U.S. dollar index was largely steady after two

sessions of gains, last up 0.05%. Most Asian currencies were

subdued, with the Malaysian ringgit, the Philippine peso

, and Thai baht each slipping 0.2%.

The Taiwan dollar held firm and remains the

region's top-performing currency this year, up more than 8%.

Analysts at Bank of America said that the currency's rally

stalled in July and August amid equity outflows, but with Fed

rate cuts largely priced in, Taiwan's record trade surplus and

renewed equity inflows could fuel a second leg of gains.

In Indonesia, markets stabilised after the abrupt dismissal

of Finance Minister Sri Mulyani Indrawati earlier this week

triggered a selloff in long-tenor sovereign bonds.

The country may revise its $236 billion budget proposal for

2026, newly appointed Finance Minister Purbaya Yudhi Sadewa said

late on Wednesday, just days after Indrawati's departure.

The spread between Indonesia's one-year and 10-year bonds

widened to over 120 bps this month, the most since January 2023.

This reflects investor concerns over fiscal discipline and

long-term stability.

HIGHLIGHTS:

** Indonesian 10-year benchmark yields were little changed

** Thai consumer confidence falls in August

** Malaysia's July industrial production up 4.2%

year-on-year

Asia stock

indexes and

currencies

at 0449 GMT

COUNTRY FX RIC FX FX YTD INDEX STOCK STOCKS

DAILY % S YTD %

% DAILY

%

Japan +0.02 +6.61 0.83 12.47

China -0.00 +2.51 1.12 15.02

India -0.14 -2.96 -0.03 5.59

Indonesia -0.09 -2.31 0.85 9.67

Malaysia -0.19 +5.93 -0.52 -3.64

Philippines -0.25 +1.61 0.17 -6.10

S.Korea -0.09 +5.94 0.35 38.62

Singapore -0.04 +6.41 -0.01 14.75

Taiwan -0.03 +8.12 0.38 9.78

Thailand -0.17 +7.95 0.71 -8.08