Asian Stocks Rally on Tech Strength as Yen Hits 1986 Low and Oil Rises
Asian equities extended gains driven by a semiconductor rebound, though investors remain wary of rising Treasury yields, surging oil prices, and a weakening yen testing historical support levels.
The MSCI Asia Pacific Index gained 0.8%, recording its most significant single-day advance in a month, driven by a more than 5% jump in South Korea’s Kospi Index. This regional advance trailed a strong session for the Nasdaq 100, underpinned by a 5.2% surge in a key semiconductor gauge that signaled renewed demand for chipmakers.
Corporate developments reinforced the sector’s momentum, with Nvidia confirming its latest chip designs are now reaching customers. Super Micro Computer also surged after reporting a growing order backlog, while American Depositary Receipts of Taiwan Semiconductor Manufacturing Co. climbed 5.5% following reports of an anticipated price increase of up to 10%.
Despite the equity rally, macroeconomic pressures are mounting across global markets. The Japanese yen depreciated past 163 per dollar, a level not seen since 1986, increasing the likelihood of intervention by Japanese authorities. Concurrently, Brent crude advanced 0.6% to $91.52 a barrel after US President Donald Trump downplayed the prospect of immediate talks with Iran.
Rising energy costs have reignited inflation concerns, pushing US Treasury prices down and lifting 10- and 30-year yields to their highest levels in approximately two months. Investors are increasingly weighing the possibility that persistent inflationary pressures could force the Federal Reserve to raise interest rates.
Market participants are now pivoting to corporate earnings to validate current valuations. Nearly 20% of the S&P 500 by market value is scheduled to report results this week, including Intel on Thursday and Alphabet starting Wednesday. Goldman Sachs strategists noted that US earnings growth should continue to support equities in the second half of the year, despite near-term macroeconomic headwinds.
The recent volatility in technology shares has prompted debate over the sustainability of the artificial intelligence trade. Adam Turnquist at LPL Financial stated that the long-term AI backdrop appears intact, characterizing the recent market correction as a healthy reset rather than a fundamental breakdown in the investment theme.
In broader markets, precious metals attracted dip-buying, with gold advancing as much as 2% to trade above $4,080 an ounce and silver jumping up to 5% on Tuesday. Meanwhile, new trade policy risks emerged as President Trump announced plans via social media to impose a 100% tariff on generic drugs imported to the US beginning in August 2028.
