Global Markets Advance as AI Stocks Rebound While Yen Slides to Nearly 40-Year Low Against Dollar

By Anietie anii-bassey

Global financial markets traded mostly higher on Tuesday, with investors encouraged by strong gains on Wall Street and renewed optimism in technology stocks, even as Japan’s currency remained under heavy pressure against the U.S. dollar.

European and Asian equities largely extended Monday’s positive momentum after U.S. markets recovered from recent losses, driven by a rebound in major semiconductor and artificial intelligence-related companies.

Meanwhile, traders continued to closely monitor developments in the foreign exchange market as the Japanese yen hovered near its weakest level against the dollar in almost four decades, fueling speculation that Japanese authorities could intervene to stabilize the currency.

Across Europe, Germany’s DAX index climbed 0.8% to 24,810.48, reflecting strong investor confidence across industrial and technology sectors. France’s CAC 40 edged 0.1% higher to 8,374.80, while Britain’s FTSE 100 gained 0.4% to reach 10,524.33.

U.S. stock futures showed little movement during early trading, suggesting investors were waiting for fresh economic data and developments surrounding global monetary policy before making significant moves.

Asian markets also posted mostly positive performances, with technology shares leading gains after recovering from recent selling pressure sparked by concerns that the rapid expansion of artificial intelligence investments could be losing momentum.

Japan’s Nikkei 225 rose 0.9% to close at 70,062.32. Semiconductor equipment manufacturer Tokyo Electron advanced 3.3%, benefiting from renewed optimism surrounding chip demand. Investment giant SoftBank Group, which has significant exposure to artificial intelligence investments including OpenAI, added 1.2%.

South Korea’s Kospi index climbed 1% to 8,476.48, extending its strong performance during the ongoing global AI boom. Demand for advanced memory chips continues to support South Korea’s technology sector, particularly companies supplying hardware for artificial intelligence applications.

Samsung Electronics surged 3.4%, while memory chip manufacturer SK Hynix gained 0.8% after both companies, together with the South Korean government, unveiled plans on Monday to invest more than $500 billion in expanding the country’s semiconductor manufacturing capacity and artificial intelligence infrastructure.

The announcement reinforced investor confidence that South Korea intends to remain one of the world’s leading technology and chipmaking hubs.

Elsewhere in Asia, trading was mixed. Hong Kong’s Hang Seng Index declined 0.6% to 22,881.02 as investors locked in recent gains, while mainland China’s Shanghai Composite Index rose 0.5% to 4,094.40. Taiwan’s Taiex recorded one of the region’s strongest performances, jumping 2.5% as technology shares recovered sharply.

Investor sentiment in China also received support from stronger-than-expected manufacturing data. Official figures released by the National Bureau of Statistics showed that the country’s manufacturing Purchasing Managers’ Index (PMI) rose to 50.3 in June from 50.0 in May, moving further into expansion territory.

The improvement was largely driven by stronger export activity and increasing demand linked to the growing adoption of artificial intelligence technologies across multiple industries.

In contrast, Australia’s S&P/ASX 200 slipped 0.5% to 8,778.70, while India’s Sensex eased 0.3% as investors remained cautious ahead of upcoming economic data and central bank decisions.

Currency markets continued to focus heavily on Japan, where the yen remained under significant pressure. The U.S. dollar climbed to nearly 162.42 yen during early trading in Tokyo, marking its highest level since late 1986, before easing slightly to around 162.40 yen later in the session.

The yen’s prolonged decline has been driven primarily by the widening interest rate gap between the United States and Japan. While the U.S. Federal Reserve has maintained relatively high interest rates to combat inflation, the Bank of Japan has only recently begun gradually tightening monetary policy after years of ultra-low rates.

Japan’s central bank raised its benchmark interest rate to 1% last month, its highest level in more than three decades. However, the pace of policy tightening remains far slower than that of the Federal Reserve, making the U.S. dollar more attractive to global investors.

The sharp depreciation of the yen has increased speculation that Japanese authorities may once again step into currency markets to support the struggling currency. Previous interventions temporarily slowed the yen’s decline but failed to reverse the broader trend.

Japan’s finance minister reiterated that the government remains prepared to respond if necessary but stopped short of confirming whether intervention was imminent, stating only that officials were ready to “respond appropriately whenever necessary.”

Market analysts believe policymakers face a difficult decision. While intervention could temporarily strengthen the yen, it may prove costly without addressing the underlying differences in monetary policy between the two countries.

Analysts noted that the dollar’s rise above the 162-yen level has placed financial markets on alert, with investors closely watching for any signs of official action from Tokyo.

The euro also weakened slightly, slipping to $1.1409 from $1.1422.

On Wall Street, investor confidence strengthened on Monday as major technology companies helped drive a broad market rally. The benchmark S&P 500 rose 1.2%, while the Dow Jones Industrial Average gained 0.6%. The Nasdaq Composite, which is heavily weighted toward technology stocks, outperformed with a 2.1% increase.

Semiconductor companies were among the strongest performers. Intel advanced 2.7%, Micron Technology gained 1.1%, Nvidia added 1.3%, and Advanced Micro Devices (AMD) climbed 3.4% as investors renewed confidence in long-term demand for artificial intelligence hardware despite recent concerns over valuations.

Oil prices edged lower on Tuesday as traders monitored diplomatic efforts aimed at ending the four-month conflict between the United States and Iran, a war that has disrupted energy markets and heightened inflation concerns around the world.

Brent crude, the international benchmark, fell 0.7% to $73.40 per barrel, while U.S. benchmark West Texas Intermediate crude declined 0.8% to $70.22 per barrel.

Although oil prices remain above levels seen before the conflict began, they have stabilized in recent days following announcements that both the United States and Iran will send delegations to Qatar for diplomatic discussions. However, Tehran has maintained that it has not agreed to hold direct talks with Washington at any level.

Markets remain hopeful that a negotiated settlement could restore full access through the Strait of Hormuz, one of the world’s most important energy shipping routes.

A return to normal tanker traffic through the strategic waterway would improve global crude oil supplies and could help ease energy prices, reducing inflationary pressures that have weighed heavily on economies worldwide.

Investors are expected to remain focused in the coming days on central bank policy signals, geopolitical developments in the Middle East, currency movements, and the outlook for artificial intelligence investments, all of which continue to play a major role in shaping global financial markets.