Tokyo, Dec 22 (AP) Shares surged higher on Monday in Asia and US futures rose after a rebound in AI-related stocks like Nvidia spurred a rally on Wall Street.

Tokyo's Nikkei 225 gained 1.8 per cent to 50,402.39, helped by hefty gains for computer chip makers and other companies benefiting from the boom for artificial intelligence.

Semiconductor maker Tokyo Electron jumped 6.3 per cent while chip testing equipment maker Advantest gained 4.5 per cent.

Financial companies and exporters also saw gains after the Bank of Japan raised its key policy rate on Friday to its highest level in 30 years. Instead of causing the Japanese yen to strengthen as might be expected, it has fallen to near its lowest level this year.

Early Monday, the dollar bought 157.40 yen, down from 157.60 late Friday. Heavy selling of the yen for dollars caused a top Finance Ministry official in charge of foreign exchange issues, Atsushi Mimura, to warn that regulators would act to curb any excessive fluctuations in the currency.

Hong Kong's Hang Seng edged 0.1 per cent higher to 25,713.53. The Shanghai Composite index advanced 0.7 per cent to 3,917.72.

China's central bank left its 1-year and 5-year loan prime rates unchanged, as expected.

Elsewhere in Asia, South Korea's Kospi added 2.1 per cent to 4,105.93, and Taiwan's Taiex was 1.6 per cent higher, helped by a 2.5 per cent gain for chip maker TSMC.

In Australia, the S&P/ASX 200 picked up 0.9 per cent to 8,699.90.

“Asian equity markets are stepping onto the floor with a constructive bias, taking their cue from Friday's solid rebound in US stocks and the growing belief that the final stretch of the year still belongs to the bulls,” Stephen Innes of SPI Asset Management said in a commentary.

On Friday, the S&P 500 rose 0.9 per cent, edging 0.1 per cent higher for the week. The Dow Jones Industrial Average rose 0.4 per cent, while the Nasdaq composite index advanced 1.3 per cent, resulting in a 0.5 per cent gain for the week.

NVIDIA was the biggest force driving the market higher, with a 3.9 per cent gain. Broadcom jumped 3.2 per cent.

The technology sector has been fueling Wall Street throughout the year as companies with outsized values like Nvidia exert more pressure on markets. But those pricey stock values have come under more scrutiny from investors wondering whether they are justifiable.

Oracle rose 6.6 per cent on news that it, along with two other investors, had signed agreements to form a new TikTok US joint venture. Oracle, Silver Lake and MGX each get a 15 per cent share in the popular social video platform, ensuring that it can continue operating in the US.

Homebuilders fell following a report showing that home sales slowed from a year earlier for the first time since May. KB Home fell 8.5 per cent.

A survey from the University of Michigan showed that consumer sentiment in December improved slightly from November, but is deeply diminished from a year earlier.

Consumer confidence has been weakening throughout the year as persistent inflation squeezes consumers. The job market is also slowing while retail sales weaken. Businesses and consumers are also worrying about the continued impact of a wide-ranging US-led trade war that has targeted key partners, including China and Canada.

Inflation is still above the Federal Reserve's 2 per cent target. The central bank cut its benchmark interest rate at its most recent meeting. There has been concern about the slowing job market hurting the economy. But cutting interest rates could add more fuel to inflation, which could also stunt economic growth.

The Fed has maintained a cautious stance about interest rate policy heading into 2026, and Wall Street is mostly betting that it will hold steady on rates at its next meeting in January.

In other dealings early Monday, US benchmark crude oil gained 68 cents to USD 57.20 per barrel. Brent crude, the international standard, was up 70 cents at USD 61.17 per barrel.

The euro slipped to USD 1.1719 from USD 1.1720. (AP) SKS SKS