Asian equities climb on AI IPO optimism and upcoming central bank meetings

Asian stock markets rallied on Tuesday as Anthropic, the developer of the Claude AI model, filed for a U.S. initial public offering, signaling confidence in the sector despite recent volatility. The filing disclosed steep losses but rapid revenue growth, offering investors insight into the profitability of large-scale AI spending.

"The decision to proceed with an IPO filing amid recent volatility in the AI trade may itself be seen as a vote of confidence," said James Ooi, chief market strategist at Tiger Brokers.

The upbeat sentiment came as investors prepared for upcoming earnings from technology companies that are testing the sustainability of AI-driven growth. Market strategists highlighted the need for broader demand and durable capital-expenditure to support new infrastructure.

"Given the increased AI scrutiny of late and circular arrangements, investors will want evidence that demand is broadening beyond these interconnected relationships to support the continued infrastructure expansion," said Anthony Saglimbene, chief market strategist at Ameriprise.

"Investors need confidence that aggressive capex spending reflects durable business needs and that profitability will hold up as new infrastructure comes into service," he added.

Currency markets were largely quiet ahead of policy meetings of the Federal Reserve, European Central Bank and Bank of Japan, with most analysts expecting rates to remain unchanged. The yen steadied near 157.6 per dollar, while the U.S. 10-year Treasury yield held just under 5%.

"Can we expect US growth to hold up in an environment of higher rates? We think yes. We believe the US economy is going to be able to manage through higher interest rates," said Geng Ngarmboonanant, head of macro and policy at J.P. Morgan Asset Management.

Oil prices slipped as Brent futures fell 0.7% to $114.95 a barrel, easing from a six-month high amid hopes for a resolution to the conflict in the Middle East.

"Supply remains the key concern, with any developments that threaten physical exports likely to see Brent quickly retest recent highs and potentially push back towards $120," said Nick Twidale, chief market strategist at ATFX Global.

Gold prices edged lower, trading around $4,014 an ounce. The week’s central bank decisions are expected to shape short-term interest-rate expectations across the region.