Ai-driven wealth fuels luxury spending in japan and south korea amid market fluctuations

The AI-driven wealth surge has bolstered luxury spending in Japan and South Korea, despite broader market volatility. South Korea’s tech sector, led by Samsung Electronics and SK Hynix, saw a historic stock surge earlier this year, boosting household wealth and consumer spending. Rajiv Biswas of Asia Pacific Economic Company noted that strong tech revenues fueled bonuses, dividends, and a wealth effect, supporting first-half 2026 consumption. Morgan Stanley raised its private consumption growth forecast for 2026 to 2.6%, citing stronger household income, fiscal support, and inbound tourism. Luxury sales in South Korea, including a 20% rise at Shinsegae, reflect this trend, with Bank of America noting a one-year lag between stock investments and department store sales. Japanese luxury retailers also saw growth, with Takashimaya reporting an 3.9% sales increase in August and Richemont noting a 36% jump in Japan for the June quarter. Hermes saw an 11% sales rise in Japan for the first half of 2026. However, Biswas warned that Japan’s AI wealth effect may be limited due to low stock market exposure among households. Meanwhile, South Korea’s semiconductor industry is expected to drive broader economic benefits over the next three to five years, with Samsung and SK Hynix employee compensation projected to rise sharply.