Japanese and South Korean shares surged in Tuesday morning trading, carrying Asian markets higher after a strong rebound on Wall Street led by chip stocks.

Japan's Nikkei 225 stood at 60,246.46 at 10:08am in Tokyo, up 1,470.96 points, or 2.50%, after opening at 59,372.28 and touching an early high of 60,619.45. South Korea's Kospi rose 3.83% to 5,211.00 in morning trading in Seoul, while the Kosdaq gained 3.80% to 663.24. The figures are morning readings from a session that was still under way, not closing prices.

Chip stocks lead the rebound

The Asian session followed a powerful Monday on Wall Street. The Nasdaq Composite closed at 25,253.14, up 2.74%, while the Philadelphia Semiconductor Index rose 6.85% to 10,033.93, according to Nasdaq data. The Dow Jones Industrial Average gained 2.15% to 52,389.75 and the S&P 500 rose 2.35% to 7,549.94.

Chip shares had been at the centre of last week's sell-off, when worries about the pace of artificial intelligence spending and the outlook for technology earnings dragged markets lower. Monday's rally, led by Advanced Micro Devices, Broadcom and other semiconductor names, gave Asian technology stocks a firmer footing at the open.

Banks and machinery rise in Tokyo

In Tokyo, bank and machinery stocks were among the early leaders. Mizuho Financial Group rose 3.7% and Mitsubishi Heavy Industries gained 4.0% in early trade, according to Dow Jones Newswires. The dollar stood at about 158.02 yen.

Easing concern about an escalation in the Middle East also helped sentiment, pulling oil prices lower overnight and removing some of the pressure that had weighed on equities in recent sessions.

The Nikkei had already steadied on Monday, closing 2.33% higher at 58,775.50 in its first up day in five sessions. That followed a drop of about 3,600 points, or nearly 6%, on Friday, in its third-largest single-day points fall on record, as dip buyers stepped in after the slide.

Australia climbs, Hong Kong mixed

Australia's ASX 200 climbed 1.00% to 9,120.3 in early trading in Sydney. Hong Kong and Shanghai had already finished Monday's session by the time Tokyo and Sydney opened: the Hang Seng ended Monday 0.13% lower at 24,448.95, with Meituan down 6.53%, while the Shanghai Composite closed 0.32% higher at 3,660.79.

What traders watch next

Attention now turns to the United States, where the October consumer price index is due at 8:30am Eastern Time on Tuesday. The report is expected to show a monthly rise of about 0.3% in headline prices and 0.2% in core prices, and it is likely to shape expectations for interest rates into the end of the year.

In Japan, SoftBank Group is due to publish its second-quarter results for fiscal 2026 on Tuesday, covering the six months to 30 September. Investors will be watching its artificial intelligence investments, liquidity and borrowing position after a sharp slide in the shares in recent weeks.

Asian markets remain volatile after a month of sharp swings in both directions, and Tuesday's morning gains do not guarantee where the region's benchmarks will finish the day.