Goldman Sachs has upgraded its rating on Japanese stocks, anticipating a boost from expected political stability. The firm also raised its target price for a key Asian equity benchmark index, indicating that markets are likely to build on their strong start to the year, supported by semiconductor-driven earnings momentum.

Strategists, including Timothy Moe, noted in a report that the earnings outlook for Asia continues to improve, particularly within the technology sector, while election outcomes in Japan also justify higher valuations.

The bank increased its target for the MSCI Asia Pacific ex-Japan Index from 855 to 890, implying an 11% upside.

Goldman Sachs set a new target of 6,400 for the Korea Composite Stock Price Index (Kospi), suggesting 16% potential gains. The report described the current AI-fueled memory chip cycle as a "super cycle" expected to be stronger and more prolonged than previous cycles.

The firm maintained overweight ratings on both South Korean and Indian equities.