On Tuesday, Japanese shares surged to a 34-year high, with the Nikkei hitting 38,010, near its 1989 record. It has seen a surge of more than 13% this year after rising 28% in 2023.
European stocks and S&P 500 futures dipped as investors awaited a US inflation report influencing Federal Reserve policy. The dollar and Treasury held steady ahead of the data. Due to investments in cryptocurrency-backed ETFs, bitcoin was hovering around $50,000.
Max Kettner, HSBC’s chief multi-asset strategist, remarked that U.S. yields had increased year to date. He pointed out that in the absence of significant tightening from the Bank of Japan, which would adversely affect the Japanese yen, it provided support to the export-driven Japanese equity market.
European stocks, including Germany’s DAX, retreated, with the Stoxx 600 down 0.51%. S&P 500 and Nasdaq futures declined, despite the S&P 500 hitting a new intraday high.
Britain’s FTSE 100 slid while the pound rose against the euro on strong wage growth data. US inflation data expected at 1330 GMT could affect markets, with economists anticipating a 2.9% CPI rise. The yen hovered near 149.4 per dollar, reflecting a 6% drop this year amidst expectations of prolonged BOJ easing.
