Tech firms led an Asian market rally Thursday on renewed optimism about demand for AI equipment following a strong earnings outlook from US chip giant Micron.

News that South Korean behemoth SK hynix had started mass production of a more advanced artificial intelligence (AI) chip also fanned optimism among investors already upbeat after China unveiled a raft of economy-boosting measures this week.

The positive sentiment on trading floors comes ahead of the release of the Federal Reserve’s preferred gauge of inflation which could play a role in officials’ plans for interest rates, following last week’s mood-boosting bumper cut.

Tech shares have been the main driver of a surge in global markets this year – pushing several to record highs – as demand for all things AI heats up.

READ: Asian markets boosted by US rate cut, China stimulus hope

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While they have seen a lull in recent weeks on worries the rally may have been overblown, there is optimism that there are more gains ahead.

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The latest jump came after Micron Technology on Wednesday unveiled better-than-expected sales and profit forecasts, which ramped up hopes for demand for AI gear.

That was followed Thursday by reports that SK hynix had started producing the new, advanced chips, pushing its stocks more than eight percent higher in Seoul.

There were also big gains for rival South Korean giant Samsung and Japan’s Sony, while e-commerce titan Alibaba and JD.com joined the tech surge in Hong Kong.

Tokyo rose more than two percent as exporters were lifted by the weaker yen, which was sitting at three-week lows despite bets on further Fed monetary policy easing.

Hong Kong and Shanghai continued to build on the week’s strong advance, while Sydney, Seoul, Singapore, Wellington, Taipei, Manila and Jakarta were also well up.

China announced a fresh batch of measures aimed at boosting jobs in China – particularly among young people – and helping the poorest with handouts, amid hopes for more to come as the country heads for a week-long break.

A raft of stimulus on Tuesday and Wednesday suggested leaders were listening to calls to reinvigorate the world’s number two economy, fanning optimism for a much-needed recovery.

READ:  Asian markets track Wall Street record to extend global rally

But while the policies were broadly welcomed, analysts have warned that there is much more to do to drag China’s economy back on track.

“There is no silver bullet that can bring China back to the double digit growth levels markets have been used to,” said Charu Chanana, head of FX strategy at Saxo Capital Markets.

“There is no single policy step that will resolve China’s structural issues of debt, deflation and demographics. But the direction of travel is encouraging, and this can help to repair some of the confidence levels in the economy and policymakers.”

Attention is also turning to Friday’s release of US personal consumption expenditure figures, which is the Fed’s go-to measure of inflation.

Debate is swirling on the central bank’s next move after last week’s 50-basis-point rate cut, and another PCE reading pointing to a slowdown could boost the chances of another big move.

Key figures around 0300 GMT

• Tokyo – Nikkei 225: UP 2.5 percent at 38,812.94 (break)
• Hong Kong – Hang Seng Index: UP 1.6 percent at 19,439.11
• Shanghai – Composite: UP 0.7 percent at 2,917.58
• Euro/dollar: UP at $1.1139 from $1.1130 on Wednesday
• Pound/dollar: UP at $1.3330 from $1.3317
• Dollar/yen: UP at 144.89 yen from 144.81 yen
• Euro/pound: UP at 83.56 pence from 83.54 pence
• West Texas Intermediate: UP 0.2 percent at $69.84 per barrel
• Brent North Sea Crude: UP 0.3 percent at $73.66 per barrel
• New York – Dow: DOWN 0.7 percent at 41,914.75 (close)
• London – FTSE 100: DOWN 0.2 percent at 8,268.70 (close)