Japanese, South Korean Luxury Stocks Hold Steady in Early AI Rally; Samsung, SK Hynix Pay Pools Hit 114.9 Trillion Won

The AI-driven wealth surge collided with market volatility, yet it failed to dampen Asia’s affluent appetite for jewelry and watches. Recent data indicates that household wealth in South Korea and Japan, buoyed by AI-related equities, continues to flow into luxury counters—even as the broader market stalls.

South Korea offers the clearest case. Earlier this year, tech giants like Samsung Electronics and SK Hynix drove a historic stock rally, swelling household net worth. Despite subsequent market turbulence, consumption proved more resilient than anticipated. Rajiv Biswas, CEO of Asia Pacific Economics, highlighted the mechanism: strong tech revenues funded high bonuses and dividends, while rising stock prices created a wealth effect that supported consumer spending in the first half of 2026. In a September 17 report, Catherine Wu, Morgan Stanley’s chief economist for South Korea and Taiwan, noted that while Korean consumption dipped in July, it rebounded in September. The firm attributed part of the July slowdown to market volatility but emphasized that consumer confidence in a spending recovery remains robust. Supported by stronger household income, fiscal measures, increased wealth, and inbound tourism, Morgan Stanley raised its private consumption growth forecast for the year from 2.2% to 2.6%.

Department stores serve as a barometer for this resilience. According to Bank of America, Shinsegae, South Korea’s leading luxury department store, recorded a 15% year-on-year increase in same-store sales in August, with luxury sales up 20% and revenue from international customers surging 82%. This aligns with Bank of America’s historical findings: South Korean department store sales tend to track household stock investments, exhibiting the tightest correlation with a lag of approximately one year. Luxury groups have also confirmed sustained demand—LVMH reported robust growth in Asian markets outside Japan in the first half of the year, with Bernard Arnault specifically citing Louis Vuitton’s “outstanding performance” in new Seoul and Beijing stores as a key driver for second-quarter acceleration. Richemont reported a 21% increase in Asia-Pacific sales for the quarter ending June, with South Korea and Taiwan emerging as standout markets.

However, this momentum is now testing the limits of a cooling trend. Luxury sales and the stock prices of major South Korean department store operators previously soared alongside the broader market, but JPMorgan’s assessment on September 18 suggested that “demand is no longer universally strong, but it hasn’t collapsed.” Analysts noted that luxury demand has cooled since July due to increased volatility, though jewelry, watches, and top-tier brands have held up longer than the broader category.

Rising stock prices represent just one channel through which the AI boom has benefited South Korean households. Morgan Stanley now anticipates that massive profits from the semiconductor sector will spread more broadly through investment, government fiscal policies, and household income. The firm stated, “South Korea is about to monetize the semiconductor supercycle on an unprecedented scale and duration,” with benefits potentially permeating the economy over the next three to five years. Employee compensation offers a more direct channel: the firm estimates that total employee compensation from Samsung Electronics and SK Hynix could reach 66.7 trillion won this year, rising to 107.6 trillion won in 2027, and further to 114.9 trillion won in 2028. The average annual cash bonus during 2026-2028 could be roughly 20 times larger than in 2025. This implies that even if stock price gains become less reliable, a source of consumption insulated from market fluctuations will continue to drive demand.

Japanese high-end retailers have also witnessed strong spending from wealthy domestic customers, as the Japanese stock market has performed well this year, with AI-related chip and equipment manufacturers among the top beneficiaries. Takashimaya saw a 3.9% year-on-year increase in in-store sales in August, while Richemont reported a sharp 36% increase in sales in Japan for the quarter ending June, driven by both domestic shoppers and tourists. Hermes also recorded an 11% increase in sales in Japan for the first half of the year, calculated at constant exchange rates. Biswas cautioned that the AI wealth effect may be more limited in Japan, as most Japanese households have low direct exposure to the stock market, with assets heavily concentrated in low-risk fixed-income products.

When AI’s computational ambitions translate into paychecks and stock valuations, the first things to change are often the price tags on counters and the city skylines.