This is a straightforward continuation of the theme we flagged in our gold piece, where the weak US payrolls print pushed traders to slash Fed hike bets, and that same repricing is now the clear driver behind the rally in Korean and Japanese chip stocks. The Kosdaq's circuit breaker trigger points to genuinely aggressive positioning rather than a modest relief bounce, which is consistent with a market that had been under pressure for seven straight weeks on the Kospi and was primed for a sharp reversal on any dovish catalyst. The Nikkei's gains being capped by Middle East uncertainty is the one note of caution here, and ties directly into the Hormuz standoff and tanker strike we have been covering, since Japan's economy remains more exposed than most to oil price swings given its import dependence. If the Fed repricing continues to dominate sentiment, Asian equities have room to keep grinding higher, but a fresh escalation out of the Gulf remains the more likely circuit breaker on the upside for Japanese shares specifically, even as Korean tech names trade more on the domestic AI and chip cycle than on oil.---Korean and Japanese chip stocks are riding the same Fed repricing wave that lifted gold, though Middle East risk is keeping a lid on how far Japan's rally can run.Summary:South Korean and Japanese shares rose Monday, led by chipmakers, tracking Wall Street's rally after a weak US jobs report eased Fed rate hike worriesThe Kospi rose around 50 points, or roughly 0.8%, to around 6,300, snapping seven straight weeks of declinesThe Kosdaq surged more than 5%, triggering a buy-side circuit breaker around 9:50 a.m. local timeThe Nikkei rose around 2% to roughly 66,900, tracking Wall Street's AI and chip-linked gainsThe Topix edged up around 0.4% to roughly 4,090Middle East conflict uncertainty capped further gains on the Nikkei despite the broader rallySouth Korean and Japanese shares rose on Monday, led by chipmaker heavyweights, after Wall Street rallied on Friday as a weak US jobs report eased worries about further Federal Reserve interest rate hikes. The benchmark Kospi climbed around 50 points, or roughly 0.8 percent, to around 6,300, snapping seven consecutive weeks of declines. The Kosdaq surged more than 5 percent during the session, triggering a buy-side circuit breaker. According to the Korea Exchange, the Kosdaq's buy-side circuit breaker was activated at around 9:50 a.m. local time, a mechanism that kicks in when the Kosdaq 150 futures index rises 6 percent or more while the Kosdaq 150 spot index gains at least 3 percent versus the previous close, sustained for a full minute.In Japan, the Nikkei share average rose around 2 percent to roughly 66,900, tracking gains in AI and chip linked stocks on Wall Street, while the broader Topix edged up around 0.4 percent to roughly 4,090. Uncertainty surrounding the Middle East conflict capped further gains on the index. One market participant said gains in chip related stocks supported the Nikkei, with easing bets for a Federal Reserve rate hike the main driver behind the move.The rally across both markets follows the sharp shift in US rate expectations after Friday's payrolls miss, which we covered in our earlier piece on gold's rally to a seven week high, and reflects the same repricing now flowing through into regional risk appetite. Korean chip stocks in particular have been a key beneficiary of the broader AI trade, and the scale of Monday's Kosdaq move suggests positioning had built up heavily on the short side after weeks of declines. Japan's more muted, capped advance reflects the country's continued sensitivity to Middle East developments, with the Nikkei's gains checked even as the broader risk backdrop improved, underscoring how oil and geopolitical risk remain a persistent overhang on Japanese equities even during a broadly positive session for regional markets. This article was written by Eamonn Sheridan at investinglive.com.