South Korea’s Kospi reached a record high for the second consecutive day on Friday, driven by a surge in chip and defense stocks. Index heavyweight SK Hynix experienced an increase of 6.15%, whereas defense giant Hanwha Aerospace saw a rise of 8.09%. The index concluded the trading session with an increase of 2.31%, reaching a level of 5,808.53. Other Asia-Pacific markets experienced a predominantly downward trend on Friday, following a decline in all three major Wall Street indexes overnight, which were influenced by a decrease in private credit stocks and escalating tensions between Iran and the United States. The likelihood of a military strike on Iran has increased, as U.S. President Donald Trump indicated that he would make a decision regarding military action against Tehran within the next 10 days.

Oil prices continued to increase in response to that news, with U.S. crude climbing 0.93% to trade at $67.05 per barrel on Friday. Global benchmark Brent experienced an increase of 0.33%, reaching a price of $71.9. Market participants in Asia evaluated Japan’s inflation statistics, noting that the headline inflation for January fell beneath the Bank of Japan’s 2% target for the first time in 45 months. Japan’s Nikkei 225 declined by 1.12% to 56,825.7, influenced by a downturn in consumer cyclical stocks, while the Topix experienced a 1.13% decrease, closing at 3,808.48. Shares of Sumitomo Pharma, one of the country’s largest pharmaceutical companies, exhibited volatility in early trading, initially rising by as much as 6.81% before experiencing a decline. The stock experienced a decline of 15.6% at the close.

In a distinct address, Japan’s Prime Minister Sanae Takaichi, during her inaugural policy speech in the nation’s parliament, reportedly cautioned against China’s “coercion,” asserting that it “intensified its attempts to unilaterally change the status quo … in the East China Sea and South China Sea.” Takaichi also pledged to break with “excessive fiscal austerity” in Japan and increase investments in areas like AI, chips, and shipbuilding, while adding that her government would not pursue “reckless fiscal policies.” The yield on Japan’s 10-year government bonds decreased by 4 basis points. The Hang Seng index in Hong Kong experienced a decline of 0.98%, concluding the trading session at 26,443.69, primarily influenced by the performance of technology stocks.

The markets in mainland China were closed in observance of the Lunar New Year holiday. Australia’s benchmark index concluded the trading session slightly down at 9,081.4. In the U.S. overnight, private credit and software stocks faced downward pressure, as the Dow Jones Industrial Average declined by 0.54%, while the broader S&P 500 experienced a decrease of 0.28%. The tech-heavy Nasdaq Composite experienced a decline of 0.31%.