TOKYO — Global stock markets experienced a rally on Tuesday, buoyed by a recovery in the Tokyo benchmark following last week’s significant decline.
In Europe, France’s CAC 40 rose nearly 0.2% to 7,263.55, while Germany’s DAX gained 0.3% to 17,778.44. Conversely, Britain’s FTSE 100 slipped 0.1% to 8,201.62. In the United States, futures indicated a positive trend, with Dow futures up 0.3% to 39,593.00 and S&P 500 futures adding 0.4% to 5,391.75.
Asian markets also saw positive gains, with Japan’s Nikkei 225 jumping 3.5% to close at 36,232.51. Meanwhile, Australia’s S&P/ASX 200 inched up nearly 0.2% to 7,826.80, South Korea’s Kospi gained 0.1% to 2,621.50, Hong Kong’s Hang Seng added 0.4% to 17,174.06, and the Shanghai Composite rose 0.3% to 2,867.95.
In Tokyo, shares of computer chip manufacturers surged, with Tokyo Electron increasing by 6.2%, reflecting the robust performance of tech stocks in the U.S.
Market sentiment improved as investors noted a calming trend in the yen’s recent volatility. While a weaker yen benefits major Japanese exporters such as Toyota Motor Corp. by enhancing the value of their overseas earnings, it can also diminish the nation’s purchasing power.
The U.S. dollar increased to 147.74 yen from 147.17 yen, with the euro at $1.0925, down from $1.0935.
“Ongoing geopolitical tensions in East Asia, conflicts in Eastern Europe, and disruptions in global trade are likely to influence the dollar’s outlook,” stated a currency analyst.
Japanese stocks faced their most severe drop last week since the infamous Black Monday crash of 1987, though comments from a senior official at the Bank of Japan highlighted the need for market stability, providing some reassurance.
Global uncertainties, including situations in Ukraine and the Middle East alongside concerns in China, continue to create market volatility.
In the U.S., trading was subdued on Monday, with the S&P 500 ending relatively flat. Investors are awaiting critical data releases later this week, including U.S. inflation and retail sales figures. Optimistic indicators would point to slowing inflation and robust sales.
This economic data is crucial for central banks globally, including the Federal Reserve, which is continuing to maintain interest rates at a two-decade high in efforts to combat prevailing stagflation. Potentially easing rates could stimulate the U.S. economy but may also exacerbate inflationary pressures.
In contrast, Japan’s central bank aims to foster inflation in an economy long affected by deflation by gradually increasing interest rates after years of maintaining zero or negative rates.
The release of Japan’s April-June real gross domestic product (GDP), which reflects the value of the country’s goods and services, is scheduled for Wednesday.
Analysts suggest that Japan’s economic growth may be relatively resilient, supported by recent data on domestic capital investment.
“With stabilization in energy and food prices, we’ve seen the first increase in real wages and incomes in over two years in Japan,” a strategist noted.
Major U.S. corporations, including Walmart and Home Depot, are set to report their earnings later this week, with many firms exceeding profit expectations.
In energy markets, benchmark U.S. crude saw a decline of 40 cents, settling at $79.66 a barrel, while Brent crude, the international benchmark, fell by 42 cents to $81.88 a barrel.
