* Chip stocks rise after Micron spending plan, SK Hynix

listing

* Focus on SK Hynix US market debut later on Friday

* Oil prices restrained amid renewed Middle East hostilities

* Yen firms after Japan FM Katayama comment on GPIF, pension

funds

(Updates with yen firming after Katayama comments)

By Ankur Banerjee

SINGAPORE, July 10 (Reuters) - Asian stocks rose sharply on

Friday, led by chip and AI firms as investors brushed off

concern over the stalled recovery of energy supplies through the

critical Strait of Hormuz, with tit-for-tat attacks escalating

between the U.S. and Iran.

The renewed back-and-forth attacks have further eroded the

fragile three-week-old ceasefire, bringing the spotlight back on

oil prices and what they could mean for inflation and the global

rates outlook.

Japan's bond market and currency lurched higher after

Finance Minister Satsuki Katayama said on Friday the government

wants to explore ways to encourage pension funds, including the

Government Pension Investment Fund (GPIF), to increase their

holdings of domestic financial assets.

Brent crude futures were set for a 5% week-on-week

rise, the strongest weekly performance since early May. But at

$76.03 per barrel, Brent has given up most of the gains it

picked up when the conflict began at the end of February.

"I'm looking at updates from the Middle East and things

don't look good, but investors seem incredibly resilient to

those risks at the moment, with tech again driving markets

higher," said Nick Twidale, chief market strategist at ATFX

Global in Sydney.

Japan's Nikkei rose 1.8% while South Korea's KOSPI

, the epicentre of the AI rally, gained 4%. Chip

bellwethers SK Hynix and Samsung Electronics ( SSNLF )

were up 1% and 3%, respectively, while Taiwan

markets were closed due to a typhoon.

That left the MSCI's broadest index of Asia-Pacific shares

outside Japan 1.3% higher.

"We will start on the front foot again in Asia, but I'm

still very cautious that we are not pricing in enough event risk

that the Strait of Hormuz may be closed again in the coming

days," Twidale said.

Investors have taken the escalation in stride this week,

keeping their focus instead on the AI theme that has propelled

global stocks to record highs but spurred worries about the

sustainability of the red-hot rally.

Overnight, the tech-heavy Nasdaq ended sharply

higher after Micron Technology's ( MU ) plans to invest more

than $250 billion in the U.S. through 2035 buoyed chip stocks,

with the Philadelphia SE Semiconductor Index rising 3%.

SK HYNIX U.S. DEBUT AWAITS

Attention will be on SK Hynix's U.S. market debut later on

Friday after the firm priced its American Depositary Receipts at

$149 on Thursday, raising about $26.5 billion, indicating strong

investor appetite to gain exposure to the AI supply chain.

The blockbuster offering, which will finance new factories

and equipment to meet surging AI chip demand, is set to be the

world's second-biggest share sale after SpaceX's

record-breaking IPO last month.

Sam Konrad, investment manager for Asia Equity Income at

Jupiter Asset Management, said the listing could mean that the

SK Hynix ADR trades at a premium to the local shares, but it

could still help re-rate the South Korean-listed shares.

"If SK Hynix re-rates, that should help support a re-rating

in Samsung Electronics ( SSNLF ) too, especially when they release details

of their shareholder return plans," said Konrad, who holds

shares in both South Korean firms.

SK Hynix's South Korean shares have surged an eye-popping

238% this year, taking the broader benchmark to record highs and

making the KOSPI the world's best-performing major stock market

since the start of 2025.

But the AI mania has also spurred sharp swings in recent

weeks as investors fret about sky-high valuations and worry

about the sustainability of their massive profit growth.

In currency markets, all eyes remained on the Japanese yen

, which hung around its lowest level in 40 years as

traders kept a watch for official intervention from Tokyo.

The yen got a lift from Katayama's comments and was last

0.5% firmer at 161.51 per U.S. dollar.

The dollar otherwise was mostly muted as investors awaited

catalysts to gauge the path of U.S. interest rates. Traders are

pricing in 34 basis points of hikes for the year but that may

change depending on the inflation pressure from the war.

In commodities, gold looked set to post a 1% decline

for the week and was last at $4,113 per ounce in early trading.