Asian stock markets jumped on Tuesday, led by a strong surge in Japan’s Nikkei index to all-time highs as investor appetite for artificial intelligence and expectations of fresh fiscal stimulus boosted sentiment across the region. Tokyo equities climbed more than 3%, while markets in South Korea, Taiwan and China also posted gains as the MSCI Asia-Pacific index hit record levels, driven by robust earnings expectations in tech and industrial sectors.

Investors attributed part of the optimism to mounting AI-related demand prospects, particularly in semiconductor and cloud sectors, though concerns lingered about potential policy shifts. China’s markets reflected resilience, with strong participation in mid- and small-cap names amid a renewed focus on tech self-sufficiency. South Korean and Taiwan exchanges recorded notable gains in chipmakers and electronics makers closely tied to global supply chains. Market participants also noted that the extended holiday period’s thin liquidity can accentuate price moves.

Currency markets showed significant yen weakness, prompting talk of possible intervention should the currency slide further toward critical thresholds. A softer yen boosts competitiveness for domestic exporters but raises import costs, and authorities are weighing potential FX support measures. The broader dollar index was mixed against other major currencies amid ongoing debates about Federal Reserve independence and political pressures on central bank policy.

Oil and commodity markets also reacted to geopolitical developments, with crude prices holding elevated levels on concerns about potential supply disruptions in Iran and related Middle Eastern tensions. Gold extended gains amid uncertainty over central bank policy independence following high-profile scrutiny over leadership in major economies.

Overall, Asian markets’ record gains reflect a blend of tech-led optimism and risk appetite, balanced by caution ahead of key macroeconomic releases this week that could influence the global interest-rate outlook and capital flows.

Source: Reuters