Andrea Innocenti The first trading day of the week in the Japanese capital was positive , with the benchmark Nikkei index rising 0,69%, or 446 points, to 65.465,06. The gain came immediately after the long break introduced by Silver Week , a holiday that suspended trading for several days.
Despite the correction in US stock markets, the Tokyo Stock Exchange is managing to counteract this, driven by more optimistic sentiment among local investors.
The Yen's Behavior Against the Dollar and the Euro
Paralleling the stock market movement, the Japanese currency is showing signs of weakening. The yen is falling to 158,20 yen per dollar and 180,10 yen per euro, indicating increased currency pressure.
This trend is fueled by the strengthening of the US dollar, which reacts to rising US government bond yields, and by a higher perception of risk in emerging markets, pushing investors towards more stable currencies.
Asian Market Performance: Seoul, Hong Kong, Shanghai, and Shenzhen
Outside Japan, the day is notable for its low homogeneity.
The Seoul stock market rose 0,9%, buoyed by positive tech data, while Hong Kong continued its decline, down around 1% at the close. Shares in Shanghai and Shenzhen followed the downward trend, each down around 0,3%. The divergence reflects global uncertainty, as investors await signals from Iran regarding oil prices and the upcoming meeting between Presidents Donald Trump and Xi Jinping , which will focus on trade tariffs and geopolitical relations.
Influence of oil prices and economic indicators
Crude oil prices, hovering just above $100 a barrel, are fueling inflation fears and increasing pressure on government bonds . The ongoing decline in oil prices could alleviate these concerns if they continue, but analysts remain cautious until the impact on Asian trade flows becomes clear.
US T-bond yields at highest level since 2007
In the United States, 10-year Treasury yields hit 5,13%, the highest level recorded since July 2007. The 0,17 percentage point increase, the largest since May, comes amid a strengthening dollar and downward pressure on global equity markets. The rise in yields was partly fueled by oil prices returning above the $100 threshold and the recent S&P survey of private sector economic activity, which highlighted increasing price pressures.
Federal Reserve Board member Michael Barr stated that further interest rate hikes may be necessary to contain inflation. His statement reinforces expectations of a more restrictive interest rate regime, with direct consequences for financing costs for businesses and governments. Rising yields, in fact, make public debt financing more expensive, thus increasing the vulnerability of countries with high levels of indebtedness.