Asian stock benchmarks may have already jumped by double-digits this year, but investors say the rally still has more room to run as earnings growth signals future upside and keeps valuation levels in check.

Japan’s Nikkei 225 is up 2.6% on the month at 20,166.21 through 11:30am in Hong Kong on June 28. Taiwan’s benchmark index hit a 27-year high in June and has jumped 3.6% this month. Meanwhile, the Kospi Index in South Korea is in the black for the seventh straight month and has tacked on 17.8% so far this year, good for 14th best out of 96 global benchmarks tracked by Bloomberg.

The gains in June extend a regional rally gaining momentum since last year that has been built on attractive valuations and upward earnings potential.

Global investors have also renewed interest in the region as a chance to hedge against potential overheating in US stocks, which have been locked in an eight-year bull market. The US dollar has since depreciated as funds flow from West to East, lifting all boats in Asian equities.

“Asia is still the most attractive region on a valuation basis with a bias toward North Asia – Hong Kong, Taiwan, China and Korea,” Bill Maldonado, CIO Asia-Pacific at HSBC Global Asset Management, wrote in a June report. “Improving earnings and more efficient use of cash on balance sheets support rising returns on equity.”

The MSCI AC Asia Index, which tracks a combined 11 developed and emerging markets, traded at 13.5 times forward earnings through May. By contrast, the MSCI World had a forward valuation of 16.6 times and MSCI USA traded at 17.9 times.

With Asian stock prices trending upward, it has been rising earnings that have kept the counters trading at a significant discount to their global peers.

Nearly seven out of 10 companies listed in Japan’s Topix 500 reported better-than-expected first quarter earnings, according to Pictet Wealth Management. The Swiss-based fund house added that average net income was a surprising 43% in Japan and 37% in Asia ex-Japan.

A backdrop of economic growth is driving earnings upward in the region. The World Bank said in an April report that its three-year outlook for East Asia is “broadly positive” on account of improving domestic demand and stabilizing global conditions. It increased its 2018 growth forecast from 6% to 6.1% for a grouping of economies in the region that includes China, Indonesia and Philippines.

Meanwhile, Asia has benefited from a pick-up in global trade amid signs of resurgence in developed markets and the decline in the US dollar. Exports in South Korea surged 24.1% in April from the previous year, the largest growth in nearly six years, while Japan’s outbound trade increase in May set a two-year high.

In China, exports and imports for May both topped analyst estimates despite a recent manufacturing slowdown.

Asian companies are encouraged by the improved economic environment and may look to seize the opportunity and expand their businesses. The Thomson Reuters/INSEAD Asian Business Sentiment Index hit a three-year high for the second quarter of 2017, increasing to 74 from 70 in the previous period. The indicator is positive when it reads over 50.

Going forward this year, Pictet is projecting 13.9% earnings growth in Asia ex-Japan. It said technology will lead the way with a potential 32.5% jump, followed by single-digit rises for the cyclical sector, financials, and oil and gas.

Investors have scrambled to load up on Asia’s heavyweight technology companies given their increasing technical sophistication and direct access to billions of consumers.

“The medium to long-term prospects in this sector [are] actually excellent,” said Heinz Rüttimann, emerging markets strategist at Julius Baer. “It’s certainly premature to compare the IT sector in emerging markets with the Nasdaq 100 but we are going into this direction.”

One of the most sought-after technology blue chips this year has been Shenzhen-based Tencent Holdings. The media and entertainment titan has surged 49.6% this year so far in Hong Kong, outpacing the benchmark Hang Seng Index’s 17% rise.

Tencent announced first-quarter profits of 14.5 billion yuan ($2.1 billion), topping forecasts of 13 billion yuan.

Alibaba, China’s other technology heavyweight, delighted investors after projecting in June that it would deliver up to 49% revenue growth for the fiscal year ending in March.

Meanwhile, Samsung Electronics reported first-quarter profits of 7.49 trillion won (US$6.6 billion) and its stock set a new high this year, trading up 32.4% in the year so far.

Buying interest in Asian stocks has triggered a wave of liquidity to the region. US-based funds that buy international stocks raised US$7.7 billion in the week ended June 14, according to Investment Company Institute data. The international funds have attracted more than US$100 billion so far this year, the most since 2015.

Increased liquidity has translated to more trading activity. In Hong Kong, main board trading turnover has breached the HK$100 billion (US$12.8 billion) mark eight days so far this year after only doing so four times in 2016. Daily turnover averaged HK$78.3 billion in May versus HK$59.6 billion a year earlier.