MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.3%, after dropping last week

Asian shares followed Tokyo higher on Monday as AI hype helped the tech sector ahead of a week packed with central bank meetings, major economic data and corporate earnings.

Chip stocks have been on a roll since Taiwan Semiconductor Manufacturing upgraded its profit outlook last week on surging demand for high-end chips used in AI applications, sending the Nikkei to a new 34-year high. The index jumped another 0.8% early on Monday, to be up 8.3% so far in January.

Chipmakers, including Nvidia and Advanced Micro Devices, were among the gainers of the AI-driven rally.

That should sharpen attention on results from Intel and IBM this week, along with Tesla, Netflix , Lockheed Martin and a host of others.

S&P 500 futures rose 0.1%, after hitting a record close on Friday, while Nasdaq futures gained 0.3%.

MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.3%, after dropping last week.

The index has been pressured by weakness in China’s markets, which reached five-year lows last week and triggered speculation state funds were having to support stocks.

Beijing still appears reluctant to deliver aggressive stimulus and the central bank is expected to again skip on a rate cut in its market operations on Monday.

The BoJ is also expected to keep policy super-easy at a meeting on Tuesday, helped by a second month of slowdown in consumer prices.

The general assumption among analysts is the central bank will want to see if the spring wage rounds deliver strong growth before deciding whether to nudge toward tightening.

Drawing on the first ‘shunto’ results released mid-March and the April branch managers’ meeting, the Bank of Japan will be able to confirm the sustainability of wages and exit negative interest rate policy in April, wrote Barclays analysts in a note.

Thereafter, we expect gradual rate hikes from H2 24, but policy rates should remain well below neutral, they said.