Most Asian equities were set for their strongest week in more than a month on Friday, buoyed by a rally in technology shares, with Taiwan's benchmark index hitting a record high and South Korea's KOSPI climbing to a two-week peak.
A robust rally in artificial intelligence-related stocks has been a key driver behind the surge in Taiwan and South Korean stocks, with heavyweight chipmakers and tech suppliers benefiting from robust demand for AI infrastructure.
An MSCI gauge of emerging Asian equities inched 0.1% higher on Friday, heading for a 1.7% gain this week in what could be its best week since late November.
South Korea and Taiwan make up 40% of the index. Taiwan equities rose as much as 0.8% in their fifth straight session of gains and hit a record high of 28,590.91. The benchmark has gained 3% so far this week, poised for its best week since late November.
South Korea's KOSPI climbed as much as 0.8% to its highest level since December 12. It has risen 2.5% this week, set for its strongest week since early December.
"We expect Korean equities to post further gains next year... continued momentum in technology stocks will remain the principal driver, as global investment in AI infrastructure continues," Gareth Leather, senior Asia economist at Capital Economics, said in an earlier note.
Among other stock markets, Singapore traded largely flat but was on track for its best week since October-end with a 1.5% gain.
Philippine stocks rose 0.1%, heading for a 2.2% weekly gain in what could be their best week since late November.
Stocks in Thailand shed 0.4% and those in Malaysia slipped 0.3% on Friday. However, both markets were up about 0.5% for the week.
Among currencies, the Malaysian ringgit rose 0.3%, hitting its highest point since 2021. The region's best currency of 2025 has appreciated more than 1% this week, eyeing its best week since mid-May.
"The ringgit continues to benefit from Malaysia's stable macro backdrop, ongoing structural reforms and selective investor flows," analysts at Kenanga Investment Bank said in an earlier note.
"While episodic global volatility may introduce temporary swings, the combination of policy credibility, export inflows underpins a bullish medium-term outlook for the ringgit."
South Korea's won rose as much as 1.1% to hit its highest level since November 6. For the week, the currency has risen 2.4%, eyeing its best week since late April, largely benefiting from the national pension fund's steps to support the currency.
Elsewhere in the region, the Thai baht was largely unchanged but has appreciated nearly 1.3% this week in what could be its best since October-end.
Singapore's dollar traded largely flat but was headed for its best week in more than a month, while the Philippine peso was tracking a weekly loss of 0.3%. Indonesian markets were closed on Friday for a holiday.
HIGHLIGHTS:
** Japan's cabinet approves record $785 billion budget, vows to keep debt in check
** Malaysia judge says ex-PM Najib and 1MDB fugitive Jho Low had 'unmistakable bond' ahead of trial verdict
** Thai rice exports seen falling to 7 million metric tons in 2026 - Reuters
