(July 1): Asian equities rose Wednesday after capping their best quarter in 17 years, as a rally in chipmakers and signs of US economic resilience fuelled optimism about corporate earnings.
Stocks advanced in Japan and Taiwan, lifting the MSCI Asia Pacific Index 0.3%. The gains came after a tech-fuelled rally lifted US stocks and a gauge of semiconductors. Markets in Hong Kong are closed for a public holiday.
Brent edged 0.5% higher to around US$73.30 a barrel in early Asian trading, recouping some of the losses from Tuesday that were driven by expectations the US-Iran ceasefire would hold.
Investors have looked past geopolitical tensions as fresh data reinforced the view that the US economy remains resilient. Steady US consumer spending and a still-solid labour market have helped ease concerns that higher energy prices and trade uncertainty would derail growth, bolstering confidence that companies can continue delivering strong earnings.
“The markets have proven to be the ultimate grinder as they keep crushing it, despite a lot of hand-wringing that has gone along with this incredible rally that has endured deep sell-offs, the Iran war and a number of other outside influences,” said JJ Kinahan at Cboe Global Markets.
Tuesday’s economic reports showed US job openings were little changed in May, signalling labour demand remained steady, while consumer confidence edged higher in June as lower gasoline prices helped offset concerns about the job market.
See also: Asian stocks climb on tech, yen hits 40-year low
Federal Reserve policymakers voted unanimously to leave interest rates steady at last month’s meeting, the first led by Chairman Kevin Warsh.
Steady employment data and elevated inflation readings have raised expectations that the Fed may need to raise rates later this year to tame price pressures. Officials will hold their next policy meeting at the end of July.
Elsewhere, gold traded just under US$4,000 an ounce. A Bloomberg gauge of the dollar edged up for a second day, while Treasuries inched up. The yield on the benchmark 10-year fell one basis point to 4.46%.
See also: US stock futures rise, oil pares climb on Iran
The yen traded around 162.65 per dollar after falling to a 40-year low earlier this week.
The currency’s slide to a four-decade low against the dollar left traders eyeing Japan’s next intervention threshold. After the currency broke through the 162 per dollar level on Tuesday, strategists increasingly pointed to 163 and beyond, arguing the Finance Ministry may tolerate a weaker yen than it did in 2024.
Meanwhile, US negotiators Jared Kushner and Steve Witkoff had positive discussions with regional leaders in Qatar and technical talks with Iran are moving ahead, according to a senior administration official.
An interim agreement signed earlier this month opened the door to a 60-day negotiating period, but those efforts faced a setback in recent days after a series of clashes over the Strait of Hormuz.
“While occasional reports of renewed friction have prompted brief moves in energy markets, investors continue to price in a relatively orderly reopening of the Strait of Hormuz and a gradual normalisation of global oil flows,” said Daniela Hathorn, senior market analyst at Capital.com.
Corporate highlights:
- Nike Inc shares fell about 1.5% in extended trading after executives on Tuesday gave a cautious outlook and warned about elevated consumer anxiety, adding to investor concerns about the sportswear company’s painfully slow turnaround.
- Coles Group Ltd said it’s in talks to buy pet store and veterinary business Greencross Pet Wellness Co, a deal that reportedly could be valued at as much as A$4 billion (US$2.8 billion or $3.57 billion).
- The US government removed foreign access restrictions on Anthropic PBC’s Fable 5 artificial intelligence model, clearing it for wider distribution after the startup resolved the Trump administration’s safety controls.
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Some of the main moves in markets:
Stocks
- S&P 500 futures were little changed as of 10.04am Tokyo time
- Japan’s Topix rose 0.9%
- Australia’s S&P/ASX 200 fell 0.2%
- Euro Stoxx 50 futures rose 0.1%
Currencies
- The Bloomberg Dollar Spot Index rose 0.1%
- The euro fell 0.1% to US$1.1408
- The Japanese yen was little changed at 162.69 per dollar
- The offshore yuan was little changed at 6.7948 per dollar
Cryptocurrencies
- Bitcoin fell 0.5% to US$58,345.11
- Ether fell 0.3% to US$1,569.28
Bonds
- The yield on 10-year Treasuries declined one basis point to 4.46%
- Japan’s 10-year yield advanced four basis points to 2.710%
- Australia’s 10-year yield advanced four basis points to 4.76%
Commodities
- West Texas Intermediate crude rose 0.6% to US$69.95 a barrel
- Spot gold fell 0.4% to US$3,991.22 an ounce
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