Stock markets across the Asia-Pacific region advanced on Tuesday, propelled by a powerful rally in Tokyo that saw Japan's benchmark index smash through a new record. The surge tracked fresh all-time highs set on Wall Street, although US futures pointed to a softer opening.
Tokyo's Tech-Fuelled Record Break
Trading in Tokyo resumed with a bang following a market holiday, sending the Nikkei 225 soaring by 3.1% to an intraday peak of 53,814.79. The charge was led by heavyweight technology and semiconductor stocks. Advantest, a maker of chip testing equipment, rocketed 8.5%, while Tokyo Electron jumped 8.3%. Investment giant SoftBank Group also climbed 4.3%.
Investor sentiment in Japan was further influenced by domestic political developments. There is growing speculation that Prime Minister Sanae Takaichi may call a snap election to secure a stronger mandate for policies centred on increased government spending.
Mixed Performance Across the Region
The positive momentum spread across most major Asian bourses, though gains were uneven. Hong Kong's Hang Seng Index advanced 1% to 26,877.01. The session was highlighted by the stellar debut of Chinese chip designer GigaDevice Semiconductor, whose shares skyrocketed 54% in early trading.
South Korea's Kospi traded 0.6% higher, breaching its own intraday records to reach 4,651.67. Australia's S&P/ASX 200 gained 0.8%, and Taiwan's Taiex rose 0.5%. However, mainland China's Shanghai Composite edged down less than 0.1%, and India's Sensex shed 0.3%.
Wall Street's Record Run and Fed Tensions
The Asian rally took its cue from another record-setting session on Wall Street. The S&P 500 rose almost 0.2% to a new high of 6,977.27, while the Dow Jones Industrial Average also edged up 0.2% to 49,590.20. The Nasdaq composite gained 0.3%.
Market dynamics in the US are being shaped by a complex interplay between the Federal Reserve and the White House. Investors appear to be balancing concerns over the potential weakening of the Fed's independence against expectations that President Donald Trump could pressure the central bank into faster interest rate cuts. Lower rates typically boost stock prices by making credit cheaper.
Tensions between Trump and Fed Chair Jerome Powell have escalated recently after the Department of Justice subpoenaed the Fed and threatened a criminal indictment related to Powell's testimony on renovations at the central bank's headquarters. The White House stated that Trump did not direct the Justice Department to investigate Powell.
In corporate news, Alphabet's market value surpassed $4 trillion after Apple announced a deal to use Google's Gemini AI to enhance its Siri assistant. Conversely, credit card companies faced significant losses after President Trump proposed a one-year, 10% cap on credit card interest rates, a move that could severely impact their profits.
Commodities and Currency Movements
In early Tuesday commodity trading, oil prices gained ground while the price of gold dipped 0.2%. Silver rose 0.8%. In currency markets, the US dollar strengthened against the Japanese yen, rising to 158.72 yen from 158.07, trading near its highest level in a year. The euro slipped marginally against the dollar.
