Nikkei Index Breaks 70,000 Intraday; SK Hynix Rises Over 4%; South Korean Defense Stocks Collectively Surge

TradingKey - During the Asian trading session on June 16, the Nikkei 225 Index broke through the 70,000-point mark intraday; South Korean shares extended yesterday's strong momentum, with the KOSPI Index closing up 2.11%.

The Nikkei 225 Index opened slightly lower at 69,288.91 points and came under pressure in the morning session due to profit-taking following a surge in the previous trading day. In the afternoon, the Bank of Japan announced a 25 basis point interest rate hike to 1%, in line with market expectations. The index immediately surged, touching an intraday high of 70,020.68 points before pulling back to close at 69,404.45 points, an increase of 0.13%. The TOPIX closed at 3,987.64 points, down 0.3%.

[Source: TradingView]

Heavyweight stocks showed mixed performance, with Fujikura rising 9.02%, Kioxia closing up about 4.19%, and Advantest gaining 3.13%; Tokyo Electron fell 2.61% and Disco dropped 4.34%. Meanwhile, the Bank of Japan stated that it will suspend tapering its bond purchases from April 2027, maintaining the monthly Japanese government bond (JGB) purchase scale at around 2 trillion yen.

South Korea's KOSPI Index opened higher at 8,696.55 points, up 150.57 points from the previous day, and closed at 8,726.6 points, an increase of 2.11%. Semiconductor heavyweights led the gains, with SK Hynix briefly reaching 2.4 million won intraday, nearing its all-time high, before closing at 2.382 million won, up 4.11%; Samsung Electronics rose about 1.78% to close at 343,000 won.

[Source: TradingView]

The defense sector performed particularly well, with South Korean defense stocks soaring collectively, boosted by expectations that arms deals in the Middle East could unfreeze after the end of the US-Iran war. LIG Nex1 touched its 30% daily limit intraday and closed up about 18.58%; Hanwha Aerospace closed up 9.13%; Hyundai Rotem closed up 6.34%. Analysts pointed out that suspended negotiations between Hanwha Aerospace and Saudi Arabia, as well as Hyundai Rotem's talks to export 250 K2 tanks to Iraq, are both expected to resume rapidly after the war ends.

Overall, the framework for a ceasefire agreement reached between the US and Iran drove international oil prices down significantly, with Brent crude falling about 5% to around $83 per barrel; overnight, the US Nasdaq jumped 3.07% and the Philadelphia Semiconductor Index rose 5.45%. Following the implementation of the Bank of Japan's rate hike, market sentiment was further boosted, and the Nikkei Index took the opportunity to reach a historic milestone intraday.