Japanese and Taiwanese Stocks Reach Record Highs as Tech Firms Rally

On Thursday, Japanese and Taiwanese shares surged to record levels, driven by a strong performance in the technology sector. Investors are optimistic about a potential interest rate cut by the U.S. Federal Reserve next week, which has boosted market sentiment. Additionally, European Central Bank’s expected decision to maintain steady rates is likely to keep the door open for further easing in light of uncertain trade and political conditions.

Notably, oil prices saw an increase following Poland’s interception of suspected Russian drones and the U.S.’s push for new sanctions on Russian oil buyers. Gold prices also climbed, nearing all-time highs.

In Japan, the Nikkei rose by 0.8% to hit a record high, with significant gains in tech, energy, and utility companies. Similarly, Taiwanese shares also set a new record, driven by a 2.5% increase in leading chipmaker TSMC.

SoftBank, a prominent Japanese conglomerate, saw its shares soar nearly 9% after its partner Oracle experienced a significant surge on Wall Street. Nasdaq and S&P 500 futures also showed positive trends.

On the other hand, MSCI’s broadest index of Asia-Pacific shares excluding Japan faced a slight decline, largely impacted by the Hang Seng index in Hong Kong dropping by 0.9%.

The U.S. producer prices report led to speculation about three potential interest rate cuts by the Federal Reserve this year. Investors are closely watching the consumer prices index for August, with expectations of a modest increase, primarily driven by core measures.

As the market awaits further economic data releases, the U.S. dollar remained steady, while the Australian dollar hit a 10-month high overnight. In the bond market, Treasury yields saw a slight increase, calming concerns about investor appetite for long-term U.S. debt.

Looking ahead, all eyes are on the Treasury’s upcoming $22 billion sale of 30-year bonds, which could provide valuable insights into market sentiment. Oil prices and gold prices remained stable, indicating a positive outlook for commodity markets.

Overall, the current market conditions reflect a positive sentiment, fueled by expectations of monetary policy easing and strong performance in key economic indicators. As investors analyze the evolving economic landscape, the focus remains on potential monetary policy adjustments and geopolitical developments.