MSCI EM and Nikkei hit records

Asian equities are ripping higher again — but the important part is what actually set the pace. This is not a broad, sleepy “risk-on” move. It is a chip-led rally, pulled by AI demand, strong megacap earnings, and a market suddenly more willing to look past war risk than it was a few weeks ago. On May 4, MSCI’s Asia gauge rose 2.2% and South Korea and Taiwan both gained more than 4.5%, while Japan’s Nikkei stayed close to the record it set on April 27. ### Did both indexes really hit records today? Not quite. The Nikkei 225 already printed its record close of 60,537.36 on April 27, 2026. By May 1 it had eased back to 59,513.12, still very near the top. MSCI Emerging Markets was also near, but not above, its recent highs, not necessarily breaking them on May 4 itself. ### Why are chips doing so much work? Because AI is still eating memory and compute at a brutal pace. Taiwan Semiconductor rose 6.6% on May 4 and SK Hynix jumped 11% in the same regional surge. That matters because these are not fringe momentum names — they are core suppliers to the AI buildout. When they move together, they pull whole country indexes with them. ### Why does SK Hynix matter so much here? SK Hynix sits right in the hottest part of the trade — high-bandwidth memory, or HBM, the specialty memory that works alongside AI accelerators. In late April, the company posted a five-fold jump in quarterly profit and said HBM demand is strong and management thinks the shortage lasts. That is rocket fuel for valuation. ### Why does that spill into MSCI EM? Because MSCI EM is huge, but it is still top-heavy in the places benefiting most from the AI cycle. The index covers 1,204 large- and mid-cap stocks across emerging markets and had a market cap of $11.68 trillion as of April 30. Taiwan and South Korea are major weights, so when TSMC and SK Hynix surge, the index feels it fast. ### And why is Japan in the same move? Japan is not in MSCI EM, but it is tied into the same global trade through exporters, chip equipment, and a weaker-yen backdrop that has often helped earnings. The Nikkei’s record run also reflects how global investors are treating Japan as a liquid way to play the same themes — AI capex, tech demand, and it all runs back to the same US megacap earnings and AI spending story. ### So what is the catch? Oil and geopolitics. On May 4, Brent swung sharply as traders reacted to US plans to guide some ships through the Strait of Hormuz and to warnings from Iran that outside interference could violate the ceasefire. The yen also jumped suddenly, a reminder the region is still