Asian stocks fell broadly while Eli Lilly surged 10% | EBC Global Focus

Asian stocks were under pressure on Thursday (February 5) as concerns over surging AI investment costs intensified, though Wall Street futures attempted to recover losses amid a rebound in chipmakers.

The yen fell for a fourth consecutive day as polls ahead of Sunday's lower house election showed Prime Minister Sanae Takaichi poised for a landslide victory, with expectations of her expansionary fiscal policies boosting Japanese equities.

However, the trend of political survival taking precedence over substantive policy outcomes remains concerning. The combination of massive stimulus plans and soaring government bond yields risks triggering a debt crisis.

Goldman Sachs noted that government-mandated wage hikes and an established virtuous cycle mechanism are expected to benefit domestic demand-related stocks.

With Bank of Japan rate hikes driving up interest income, Japan's three major commercial banks posted record net profits in the first nine months of the fiscal year, helping offset further tech sector sell-offs.

Some warn of potential market corrections if election results disappoint. Japanese stocks have already outperformed most developed markets.

The Nikkei 225 maintains its long-term uptrend amid increased volatility. As long as support at 53,490 holds, a return to the 55,000 level appears likely.

Market Movers

As of February 4 close, Eli Lilly led gains among EBC products after the pharmaceutical company issued strong sales guidance highlighting its weight-loss drug portfolio.

Lockheed Martin shares fell after DZ Bank downgraded the stock from buy to hold. The defense contractor had gained about 31% in January following Trump's call for increased military spending.

Uranium prices retreated from multi-year highs as the US proposed quadrupling domestic nuclear capacity while global production remains below pre-Fukushima levels.