Asian shares advance, yen slips after AI stocks push higher on Wall Street

Shares surged higher Monday in Asia and U.S. futures rose after a rebound in AI-related stocks like Nvidia spurred a rally on Wall Street.

Tokyo's Nikkei 225 gained 1.9% to 50,455.07, helped by hefty gains for computer chip makers and other companies benefiting from the boom for artificial intelligence.

Semiconductor maker Tokyo Electron jumped 6.7% while chip testing equipment maker Advantest gained 4.7%.

Financial companies and exporters also saw gains after the Bank of Japan raised its key policy rate to its highest level in 30 years. Instead of causing the Japanese yen to strengthen as might be expected, it has fallen to near its lowest level this year.

Early Monday, the dollar bought 157.32 yen, down from 157.60 late Friday. Heavy selling of the yen for dollars caused a top Finance Ministry official in charge of foreign exchange issues, Atsushi Mimura, to warn that regulators would act to curb any excessive fluctuations in the currency.

Chinese markets saw moderate gains, with Hong Kong's Hang Seng up 0.2% to 25,751.93. The Shanghai Composite index advanced 0.7% to 3,915.84.

China's central bank left its 1-year and 5-year loan prime rates unchanged.

In Australia, the S&P/ASX 200 picked up 0.9% to 8,701.10.

''Asian equity markets are stepping onto the floor with a constructive bias, taking their cue from Friday's solid rebound in U.S. stocks and the growing belief that the final stretch of the year still belongs to the bulls,'' Stephen Innes of SPI Asset Management said in a commentary.

On Friday, the S&P 500 rose 0.9% to 6,834.50, edging 0.1% higher for the week. The Dow Jones Industrial Average rose 0.4% to 48,134.89, while the Nasdaq advanced 1.3% to 23,307.62. It notched a 0.5% gain for the week.

Nvidia was the biggest force driving the market higher, with a 3.9% gain. Broadcom jumped 3.2%.

The technology sector has been fueling Wall Street throughout the year as companies with outsized values like Nvidia exert more pressure on markets. But, those pricey stock values have come under more scrutiny from investors wondering whether they are justifiable.

Homebuilders fell following a report showing that home sales slowed from a year earlier for the first time since May. KB Home fell 8.5%.

A survey from the University of Michigan showed that consumer sentiment in December improved slightly from November, but is deeply diminished from a year earlier.

Consumer confidence has been weakening throughout the year as persistent inflation squeezes consumers. The job market is also slowing while retail sales weaken. Businesses and consumers are also worrying about the continued impact of a wide-ranging U.S.-led trade war that has targeted key partners including China and Canada.

Inflation is still above the Federal Reserve's 2% target. The central bank cut its benchmark interest rate at its most recent meeting. It has been concerned about the slowing job market hurting the economy. But cutting interest rates could add more fuel to inflation, which could also stunt economic growth.

The Fed has maintained a cautious stance about interest rate policy heading into 2026 and Wall Street is mostly betting that it will hold steady on rates at its next meeting in January.